Analysis of Google's Motorola Acquisition

bonch writes "Pundits have been analyzing Google's Motorola acquisition since its announcement. Dan Lyons, formerly known as Fake Steve Jobs, says Google never cared for the Nortel patents, and that they drove the bidding price up intentionally while negotiating to buy Motorola. This idea is questioned by MG Siegler, who believes buying Motorola for $12.5 billion — almost two years' worth of Google's annual profits — is an act of desperation. John Gruber notes that Motorola was threatening to wage a patent war against other Android partners during the time they would have been negotiating with Google, and that Motorola likely forced them into an expensive buyout rather than a patent license agreement. Google may have also been motivated by the fact that Microsoft was reportedly pursuing a Motorola buyout." S&P researchers apparently weren't a fan of the deal.

Comments

Epic Win, Or Pyrrhic Victory?

[SuperKendall]

You do not "fein interest" in something by bidding a few billion dollars. What if they had won? Very obviously they meant to get that, or at least it was a serious attempt.

Apple and Microsoft got a huge patent bundle for far less than Google, which they can now use to defend against Motorola patents Google has acquired, so in fact Apple and Microsoft (and other partners) have been shown to be eerily prescient in requiring said patents even IF this had been Google's plan all along.

And speaking of "overpaying" - Motorola has been losing money. It's not like Google has ONLY paid 12 billion dollars, they have bought continuing obligations that will cost more. And in case you hadn't noticed, 12 billion is a HUGE sum, far more than Microsoft and Apple shelled out individually - how can you say in one breath that those companies overpaid when Google bought the same commodity (patents) for a far steeper price?

I mean yes Google can use these patents against Apple/Microsoft but I question if the Motorola patent base has the same level of quality as what Microsoft/Apple had individually, never mind the Nortel stuff. Sure Google can go after them but all Google has really bought into is a very expensive draw, at best.

Which points to the real reason Google purchased Motorola - they needed at least a draw, and were willing to pay ANY price to get it. Which they did, because even though the people at Motorola could no longer design phones they sure could suss out a desperate buyer and take advantage of that...

In the end I question if it's a victory at all, for anyone. Because now Android HAS to start making Google some serious money in a way it did not before. Are you sure you wish to cheer the Android division becoming indebted to Google to the tune of 12 billion dollars and the subsequent changes that will occur as a result?