Cable Equipment maker ARRIS (NASDAQ: ARRS) yesterday acquired DVR maker Digeo, maker of Moxi set-top boxes. The price was $20 million in cash, but Digeo also brings over 70 employees and quarterly R&D budget requirements of $3 million, making this an investment that will require more cash. paidContent estimates that Paul Allen had invested over $110 million in the company, which had 280 employees in 2005.
The Moxi boxes include an intruguing social networking content sharing feature.
While some are asking whether free services such as Hulu will break the cabletelco dream of earning cash through premium television and movie services, ARRIS is clearly one provider that believes there’s a future in the TV and movie business on the internet.
As always happens when a company invests in its vision of the future, the stock declined since the announcement. Investors always prefer short term coupon clipping to actual management.
Barron’s reported that analyst Lawrence Harris of C.L. King likes the new market but warned that ARRIS will face tough competition from Cisco and Motorola.