Microsoft sells its IPTV business to Ericsson

The rumors were right: Microsoft has sold off its Mediaroom IPTV business to Ericsson.

Financial details of the transaction were not disclosed, but according to the press release the deal should be finalized in the second half of 2013. Mediaroom is based in Mountain View, Calif., and employs more than 400 people worldwide, according to the press release.

Microsoft had been a player in IPTV for more than a decade. Microsoft fielded its original IPTV on-demand service, codenamed "Tiger," in 1994. Microsoft has partnered with a number of OEMs worldwide to offer Mediaroom services. Currently, Microsoft claims it is the number one IPTV vendor.

In a 2006 interview with Fortune, Microsoft CEO Steve Ballmer said he believed success in Internet television could could kick-start Microsoft's stock price.

Just a couple of years ago, Microsoft was attempting to merge its Xbox Live and IPTV assets. That project was codenamed "Orapa" and was supposed to be released to manufacturing in the summer of 2011, so that Mediaroom operators could roll it out to customers in time for the holiday season. Microsoft teams were building Mediaroom for Windows Phone, Silverlight for Mediaroom and Mediaroom for Windows Media Center components.

Since that time, Microsoft has shifted its focus and is working to make its Xbox platform more of a set-top box and on-demand competitor. Microsoft is aiming to deliver its new Xbox console, codenamed "Durango," in time for holiday 2013. Microsoft is expected to do its initial Xbox Durango "reveal" on May 21, according to Windows Supersite's Paul Thurrott.