08/27/2013 04:21 EDT | Updated 08/27/2013 04:50 EDT

BlackBerry Mulls Spinning Off Messenger Service As Phone Assets Deemed Worthless

Thorsten Heins, chief excutive officer of BlackBerry, speaks during a Bloomberg Television interview at the annual Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2013. The Global Conference convenes chief executive officers, senior government officials and leading figures in the global capital markets to explore solutions to today's most pressing challenges in business, health, government and education. Photographer: Patrick T. Fallon/Bloomberg via Getty Images

BlackBerry is exploring spinning off its popular BBM messenger service into a separate company, further evidence that the once-dominant smartphone company could end up being broken up and sold off piecemeal.

The Wall Street Journal on Tuesday cited “people familiar with the matter” as saying BlackBerry could set up a company called BBM Inc. that would operate the Messenger network, which continues to be popular despite BlackBerry’s declining sales numbers.

BlackBerry has recently started treating BBM as more of a stand-alone product. Back in May it announced that BBM would be available on Android and iPhone devices, a sign the company is ramping up competition against growing messenger services like WhatsApp and WeTalk.

That would make BBM easier to sell if the company goes through with a proposal to break itself up and sell off the assets that still have value, one of several options on the table for the smartphone maker.

The company’s smartphones are apparently not among those valuable assets. According to a report in Bloomberg last week, the smartphone part of the business is essentially worthless because the only possible buyers would be competitors who would shut down the BlackBerry network and port customers over to their own technology.

Just shutting down the BlackBerry phone network would cost a buyer $800 million, according to BMO Capital Markets.

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Besides its Messenger service, BlackBerry has other assets that could generate cash in a fire sale. First and foremost are the company’s patents. According to Scotiabank, those patents — more than 5,000 of them — are worth about $2.25 billion, the WSJ reported Monday.

The company also has about $2.8 billion in cash reserves. That cash together with the patent portfolio works out to about $10.16 per BlackBerry share.

“With stock currently trading at $10.53, you basically get a free company included on the side,” WSJ quips.

BlackBerry got a taste of just how difficult it would be to sell the company in its entirety last year, when it hired JPMorgan and RBC banks to approach potential buyers. They found very little interest, Bloomberg reported.

Earlier this month, after another disappointing earnings season in which the new BlackBerry Z10 and Q10 phones failed to lift the company’s earnings numbers, word broke the company is exploring numerous options, including taking itself private or selling itself off.

But analysts doubted anyone would buy BlackBerry outright.

"I think there is likely no bright future for Blackberry," Bernstein analyst Pierre Ferragu told the Canadian Press.

"Their technology isn't differentiated anymore, which means consumers won't switch to them and larger players won't buy them out for that. Chinese vendors or a Microsoft could at some point be interested in buying what's left of their user base — especially corporate clients and the brand —but that wouldn't be at a premium of today's stock price."