Facebook And BlackBerry Discuss Potential Takeover Bid – Report

Executives from BlackBerry reportedly flew to California last week to discuss a potential takeover of the struggling Canadian manufacturer, although it is unclear whether the social network is still interested in making a bid.

Facebook is becoming increasingly focused on smartphones as mobile devices generate half of its advertising revenue, meaning that the acquisition of BlackBerry’s handset business would allow it to reduce the dependency on the likes of Apple and Samsung.

The firm is likely to be wary of reviving the BlackBerry brand, which is no longer being pitched to consumers, but it could simply use BlackBerry’s assets and patent portfolio, estimated to be worth $1 billion and $3 billion, to create its own branded smartphone.

Facebook BlackBerry bid

BlackBerry’s 70 million subscribers are also likely to be attractive, although this number is likely to be lower now that BlackBerry has stopped reporting on the size of its customer base.

BlackBerry Messenger (BBM) could also be a target, given Facebook’s recent push into mobile messaging. Despite the company’s other problems, the cross-platform version of BBM has proved popular, with more than 20 million people downloading the iOS and Android versions of the app since it launched last week.

Facebook has long been rumoured to be interested in creating its own smartphone, although CEO Mark Zuckerberg had said that pursuing this strategy would be a mistake.

Earlier this year the company partnered with HTC for the launch of HTC First, which came preloaded with the Facebook Home software. Facebook Home effectively acts as another homescreen for Android smartphones, offering instant content from the social network without the need to open a dedicated application.

However HTC First and Facebook Home were not well received by consumers, meaning Facebook might be re-thinking its strategy.

BlackBerry has already agreed a preliminary deal with Fairfax Holdings, but is still seeking other suitors while the hedge fund completes its due diligence. A number of other capital investment firms are considering a bid, while Intel, Google and SAP have all been reportedly considering an acquisition, as has Lenovo.

Fairfax has until 4 November to complete its review of BlackBerry’s books, and all bids must be submitted before that date. If Blackberry was to renege on its agreement with Fairfax, it would be liable for a breakup fee, although it could be off the hook if its largest shareholder is unable to raise the required funds.

BlackBerry has had a bumpy year! Try our 2013 BlackBerry quiz!