BlackBerry's Chen Would Consider BBM Sale or Spinoff in Future
Bloomberg News
Chief Executive Officer John Chen said he'd eventually consider spinning off or selling the smartphone maker's BlackBerry Messenger instant-messaging service once he's built it into a more formidable competitor.
'Running a public company, anything to help our shareholders I need to take a very serious look at,' Chen said in an interview today with Bloomberg Television at the Mobile World Congress in Barcelona. 'Today I think we need to build up that base and build up the innovation model.'
Chen's renewed focus on BBM and the company's business users has sparked a prolonged rally in the stock, which continued last week after agreed to pay $19 billion for rival messaging service WhatsApp Inc. Chen, a former SAP AG (SAP) executive who joined BlackBerry in November, today unveiled a new encrypted version of BlackBerry Messenger, aimed at its core of security-minded customers.
'The potential is going to be huge,' Chen said of BBM. 'Until we get to the point that we can showcase that potential it is a bit too early to think about getting our $19 billion.'
Facebook made its biggest acquisition ever last week to acquire WhatsApp and its more than than 450 million users, highlighting what BBM could be worth. BlackBerry's service now has more than 85 million active monthly users, Chen said today. The price Facebook paid for WhatsApp implies a valuation for BBM of as much as $3.6 billion.
BBM Protected
Chen today unveiled in Barcelona the BBM Protected service, which has improved encryption technology aimed at enterprise customers like bankers and traders who have traditionally been its most faithful customers.
'Nobody has a secure messaging infrastructure and we're the only ones who have it,' Chen said in the interview. 'It's important that we showcase and use that as a differentiator into the thousands and thousands of enterprise customers.'
BBM customers interact more frequently with the service because many clients use it for professional purposes, Chen said. The extension of the service to Microsoft Corp.'s Windows Phone platform announced yesterday will give it an additional boost, he said.
'I think you will see a natural progression and uptick of our user numbers,' Chen said at the Mobile World Congress today. 'There is a lot of value in our user base and it's going to be an asset for the company.'
The Facebook deal does not change the strategy for BBM, he said.
BlackBerry climbed as much as 4.4 percent in early trading after rising 7.6 percent to $9.83 in New York yesterday.
To contact the reporters on this story: Cornelius Rahn in Barcelona at crahn2@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net
To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net; Sarah Rabil at srabil@bloomberg.net
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