Just saw this on Google & Larry Page's tweet:
We’ve just signed an agreement to sell Motorola to Lenovo for $2.91 billion.
That's quite a bargain consider Google bought Motorola less than 2.5 years ago for $12.5 billion (although Google do get to keep the patents, which is what they wanted). However as much as I love my ThinkPads and love everything Google, I am not too sure about a Lenovo-owned Motorola. Google does keep what they
But Google only bought the Motorola Mobility originally. I think the key here is (from the linked article):
Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem.
Google gets what they wanted (patents to defend Android), and sell off what they don't want (a hardware company making mobile phones).
Yes, patents are valuable. So this means Google thinks the patents are worth at least the difference in the prices.
Anyway Motorola is only a small player in the mobile hardware market, dwarfed by some 10 or so makers, so I'm not that concerned about Lenovo.
That's quite a bargain consider Google bought Motorola less than 2.5 years ago for $12.5 billion
There's a bit more to it than that. I don't have the extact figure, but it didn't end up being as much of a loss as it sounds like.
Moto total cost $12.5B to Goog in 2011:
- $3.2B Moto's 2011 cash
- $2.4B Moto's 2011 deferred tax assets
- $2.35B Moto's Set-top-box business sold in 2012
- $75M Moto's factories business sold in 2013 (incl 7K factory employees)
- $2.91B Moto's Mobility business sold in 2014Thus Moto's remaining assets including patents, buildings (in Chicago and elsewhere), probably a good part of the 12K employees cost Goog $1.56B
So yeah not that much a loss.
I believe they valued the patents at around $5.6B. Google's purchase of Motorola was not just a play at the patents, it was a strategic play at mobile device manufacturers - in a similar vein as the Google Fiber rollouts
well looks like Google just put a new value on the Motorola patents, a cool ~$10B! bargain or wot?! looks overpriced but keep in mind something like the legal tit for tat between Apple & Samsung, in other words, choose the right patents and they may pay off handsomely in future!
ps not so good news for us consumers as expensive lawyers have to be paid one way or another, these can only push up future tech prices for consumers
They will suffer a paper loss of around $2B, but that is chump change for the strategic play as I mentioned earlier, and also to keep their competitors from holding the patents.
@morpheu — yes patent can be costly as a defence measure. Look at the recent case against Google's AdWords, where Google was forced to pay 1.36% of revenue to someone who acquired Lycos' patents. Ouch.
yep, it appears in business circles the phrase "patent troll" is the new swear word!
also, i'm no patent/intellectual property lawyer but what makes it so lucrative is that many patent judgements are retrospective i.e you can sue anytime in the future for past earnings/royalties!
I believe they valued the patents at around $5.6B.
Out of curiousity what's this based on?
Considering they could have had Palm for 2 billion easily (HP's price, anyone know what LG paid?) and surely with this line of touch devices going back decades their IP would have served google better, but I'm no expert.
@Adante, during the original purchase of Motorola, Google made a statement that the patents were worth that much, however, after all their recent dealings, they ended up netting the patents for $1.64B. Here is a quote I got from reddit user:-
People quote the 12.5B purchase forgetting that the purchase included cash and deferred tax assets, so it didn't really cost Google 12.5B.
Hope Lenovo makes better use of Motorola than Google.
hmm…the StarTAC. brings back memories
Lenovo overpaid. Microsoft got nokia for i think it was around 3 billion - where nokia were moving more units etc. Lenovo - bad move, but i am sure they can do a much better job than google tried to do. since lenovo seems to be the only PC maker actually trying to make good (slightly overpriced) products, i think they will do something good.
either way google paid way too much for the patents they wanted to keep as for the 14k patents they do hold now about 13k are useless now.
Microsoft got nokia for i think it was around 3 billion
It was $7BN, and Microsoft was already in pretty tight with Nokia long before the buyout.
Microsoft was already in pretty tight with Nokia
Huge understatement, they were basically being financed by MS.
I agree
Motorola make good handsets
Lenovo make good (solid/reliable/corporate friendly) devices
If they can build on each other strengths this can work
Well, Motorola is/was more than Motorola Mobility (smartphone unit) so Google retains some part of the original purchase. So it isn't a straightforward comparison.