Blackberry Cofounders Consider Role as White Knight

by Jeff Wiener on October 15, 2013

As concerns mount that the Fairfax consortium may not be able to secure the financial backing it needs to purchase Blackberry in its entirety, and even as Blackberry considers breaking up the company in an effort to keep such a deal alive, there is one last glimmer of hope for the once great Canadian mobile success story, and it just turns out to be a blast from Blackberry’s past.

According to reports, Blackberry cofounders Mike Lazaridis and Douglas Fregin are considering purchasing the beleaguered company, evidenced by a filing made this week with the Securities and Exchange Commission. While the duo currently own 8 percent of the company, they have engaged the services of Goldman Sachs and Centerview Partners to review their options for acquiring the remaining 92 percent.

But let’s not forget, while Lazaridis may seem like the white knight the company has been waiting for, it was under his watch (and that of co-CEO Jim Balsillie) that everything really went wrong for this company, leading me to wonder if his inability to recognize Blackberry’s struggles is once again compelling him to make very poor decisions.

While taking Blackberry private seems to be the ultimate goal here, we have to remember that it won’t be enough. As John Carey, professor of media management at Fordham Business School, explains, “The company needs to innovate, leapfrogging ahead with mobile technology that goes beyond the iPhone, and radically alter their marketing strategy away from their stodgy old customer base and towards hip early adopters.” Certainly no easy feat for a company that was unable to ward off its competitors in its hay day.

Its this radical change, letting go of all pre-conceived notions of what made Blackberry a success all those years ago, that will be the hardest hurdle to overcome, and given that Lazaridis was unable to make such changes when he was in charge the first time, he strikes me as the worst option for Blackberry now.

That said, if Lazaridis and Fregin are able to secure the financial backing they need, they might serve as Blackberry’s only option, as reports emerged late last week thatFairfax was having trouble securing additional financial partners for its acquisition proposal. Further, Fairfax’s struggles have also given rise to speculation that Blackberry is now seriously considered dividing up the company to make it easier to sell off its assets.

Its not hard to see why Lazaridis was spurred to action, though, as I’m sure the prospect of Blackberry being cut up for mobile scraps is not how any technological visionary wants their dream to end. But ultimately, however, this situation might serve as yet another example of Lazaridis having his head firmly planted in the sand, unwilling to recognize that dividing the company may not only help shareholders get some return on their investment, but that it may be the only way to keep Blackberry’s patented technologies alive, as according to Bloomberg, many company’s like Samsung, Cisco, and SAP have expressed interest in parts of Blackberry, but not the whole.

All Blackberry is willing to officially say, though, is that it “is conducting a robust and thorough review of strategic alternatives,” whether Lazaridis’ misplaced dream of keeping the glory days alive is a viable option still remains to be seen.

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Blackberry Co-Founder Abandons Takeover Bid —
December 27, 2013 at 5:42 am

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