Did TiVo’s Google Settlement Meet Expectations?

TiVo Inc. (NASDAQ:TIVO) has settled a patent dispute over digital video-recording technology with Google’s (NASDAQ:GOOG) Motorola Mobility unit, Cisco Systems Inc. (NASDAQ:CSCO), and Time Warner Cable (NYSE:TWC) for $490 million.

Analysts had expected the pay-out from Google, Cisco, and Time Warner to be much higher. The payments bring the total settlements from use of TiVo’s patents to $1.6 billion. TiVo has made previous settlements with Dish Network (NASDAQ:DISH), AT&T (NYSE:T), and Verizon (NYSE:VZ).

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TiVo shares were down 19 percent on Friday morning after rising Thursday afternoon in anticipation of the settlement. Some analysts had expected TiVo would receive up to $1 billion from Motorola alone, so the $490 million settlement between the 3 companies was far below estimates.

Google accepted responsibility for the patent litigation after it bought Motorola Mobility last year for $12.4 billion. Google has retained Motorola’s mobile phone division while selling off its cable and broadband divisions to Arris (NASDAQ:ARRS), a company that sells communications equipment to cable operators. Under the terms of the deal, Arris is responsible for up to $50 million in damages towards the TiVo settlement.