Can Spinning Off BBM Save Blackberry?

by Jeff Wiener on August 29, 2013

How do you solve a problem like Blackberry? It’s clearly a complex conundrum, as every move theWaterlootech company has made over the past few years has unfortunately wrought more problems…and very few solutions. Just how bad are things at Blackberry? Well, as we heard earlier this week, the company is considering dividing its assets, spinning off its popular BBM messaging service into its own subsidiary company.

The new subsidiary firm, tentatively called BBM Inc, would operate independently of the rest of Blackberry, allowing the smartphone maker to effectively develop what remains its last truly valuable asset. In fact, this news follows the revelation earlier this summer that BBM will be available on multiple platforms, including the PC, as the company tries to position it as a reliable and secure messaging alternative.

But will such a move enhance Blackberry’s profitability, pulling the smartphone maker back from the brink, or is creating this new messaging division nothing more than advertising the company’s key strengths ahead of an inevitable sale?

While once a revolutionary piece of mobile communication technology, offering users a means to bypass carrier’s text-messaging fees, BBM has seen its popularity wane over the last few years, with Blackberry now reporting about 60 million monthly active users. In comparison, WhatsApp, the latest messaging craze, has more than 300 million active users.

By spinning off BBM and diffusing the service across all platforms, Blackberry is hoping the world will once again become enamoured with the secure and free messenger, since all hope is lost that consumers will ever become enamoured with actual Blackberry phones ever again.

This news comes on the heels of the announcement that the company has formed a ‘special committee’ to explore strategic alternatives for the future of the company, alternatives that may include the outright sale of the entire firm.

To that end, while some see this most recent decision to operate BBM independently as Blackberry evolving in hopes of remaining a viable mobile competitor, offering it a larger global platform for enhanced advertising services and the like, it strikes me as nothing more than Blackberry making itself look as attractive as possible to potential suitors, a deft slight of hand that pushes BBM to the forefront, while masking the company’s woeful smartphone business.

In fact, while some maintain that Blackberry could potentially generate an effective global advertising service through BBM, the reality seems to be that offering such a widespread global reach will only serve as an enticing apple, bait if you will, for potential buyers down the road.

While Blackberry remains tight-lipped about its true plans for BBM or for the company itself, such news of potential spinoffs and strategic councils strike me as dark omens, ones that points directly towards Blackberry’s inevitable demise.

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