The break-up of an alliance between Hughes Electronics [NYSE: GMH] and America Online appears to be a move to prepare for the eventual sale of Hughes, a non-core business unit of General Motors [GM], said Tom Watts, a satellite analyst with SG Cowen Securities.

“This looks like one more step by Hughes and GM management to dress Hughes up for sale,” Watts said. Hughes’ satellite TV subsidiary, DirecTV, is coveted by a host of media and telephone companies. GM is exploring offers from potential buyers after a deal it previously struck to sell Hughes to EchoStar Communications [Nasdaq: DISH] unraveled late last year.

Even before the Hughes-AOL break-up, Watts said he understood that neither party had fulfilled its obligations for the alliance that ultimately would have required Hughes to spend $1 billion for additional sales, marketing, development and promotion efforts. For that reason, Hughes was “off the hook” for its commitments to AOL, he added.