BlackBerry mulls BBM spin-off, says report

BlackBerry mulls BBM spin-off, says report

28 AUG 2013

Struggling BlackBerry is weighing up a spin-off of its BlackBerry Messenger (BBM) business into a separate subsidiary, according to the Wall Street Journal.

The move is seen as an attempt to establish BBM’s value ahead of a potential sale of its parent, said the report.

The subsidiary would be called BBM Inc, according to people familiar with the situation.

BlackBerry recently announced a committee which will study strategic alternatives for the company including a possible sale.

However, sources at the company played down the speculation, stating that internal  resources and personnel have been diverted to BBM, but not for a spin-off. The work is on the messaging service’s launch on rival platforms, according to a Reuters report.

What is certainly true is that BlackBerry wants to generate greater usage and revenue for its messaging service.

BBM apps for Android and iOS devices are set to be launched this summer, the company has said. One source said this would happen “in the next few weeks”.

The company is also said to be working on new features for BBM including video chatting and availability on PCs.

BlackBerry has already said it will introduce BBM Channels, an advertising-led initiative for brands and celebrities to connect with consumers.

BBM is widely used and a well-recognised brand. Still, it will need to differentiate itself in a market in which it now has many, widely-used competitors, such as WhatsApp, LINE, Viber and a raft of others.

In addition, BlackBerry has to find a way to monetise BBM. Popular messaging apps are searching hard to find a solution to this conundrum.

However, charging end-users a subscription generates only small amounts of revenue. So companies are looking at more inventive approaches to generating income, including working with mobile operators.

This is perhaps one area where BlackBerry has some leverage, since it has long-standing relationships with many operators on which it could fall back.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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