NewBay Acquisition by RIM up for Sale

RIM Seeking Buyer For Cloud Service NewBay

Facing hundreds of million of dollars in losses Research in Motion is believed to be seeking a buyer for its NewBay cloud service provider.

A source familiar with the potential sale tells Reuters that the company wants to sell NewBay as part of its larger re-organization plans which includes laying off many of RIM’s employees and shuttering certain divisions at the company.

NewBay was purchased by RIM in October 2011 at a cost of $100 million. RIM hoped to utilize the company’s main features, namely its photo and video sharing and Social Networking Gateway which allows for multiple network sharing via a central hub.

The cloud service would have allowed BlackBerry devices to include cloud computing in mobile format, bringing RIM’s devices in line with its competitors.

The NewBay acquisition was also supposed to allow RIM’s services to be used across a range of smartphones, thus increasing revenue for the tech firm. RIM executives in purchasing NewBay had planned to offer device manufacturers a new way to conduct messaging, content delivery and analytics on all smartphones.
With BlackBerry delaying the release of its BlackBerry 10 OS until early 2013 and the upcoming sale of NewBay it is becoming less likely that Research in Motion will integrate NewBay services into its smartphones as planned.

The bright spot in RIM’s week came after company shares rose 6 percent to $8.29 on Friday when Bloomberg reported that tech giant International Business Machines Corp. had considered purchasing RIM’s enterprise division.

Do you think a buyer will come forward to acquire NewBay?