Slashdot Mirror
Was Google's Motorola Mobility Acquisition a Mistake?
Nerval's Lobster writes "Even before the Google acquisition, Motorola Mobility was engaged in a major legal battle with Microsoft, insisting that the latter needed to pay around $4 billion per year if it wanted to keep using Motorola's patents related to the H.264 video and 802.11 WiFi standards. (The patents in question affected the Xbox and other major Microsoft products.) Had that lawsuit succeeded as Motorola Mobility originally intended, it would have made Google a boatload of cash—but on April 25, a federal judge in Seattle ruled that Microsoft's royalty payments should total around $1.8 million per year. 'Based on Motorola's original demand of more than $4 billion per year from Microsoft,' patent expert Florian Mueller wrote in an April 26 posting on his FOSS Patents blog, 'it would have taken only about three years' worth of royalties for Microsoft to pay the $12.5 billion purchase price Google paid (in fact, way overpaid) for Motorola Mobility.' This latest courtroom defeat also throws into question the true worth of Motorola Mobility's patents. After all, if the best Google can earn from those patents is a few pennies-per-unit from its rivals' products, that may undermine the whole idea of paying $12.5 billion primarily for Motorola Mobility's intellectual-property portfolio.
Was Google's Motorola Mobility Acquisition a Mistake?
first answer:yes
second answer:duh
No one blinked an eye when Google paid what it did for Motorola. Now, one judge has brought out the critics and the second guessing. Unless you have a time machine, or can talk to every judge with a 'what-if', you can only do your due diligence. It's time to move on and look to the next problem, not rehash the past.
I stopped reading when I saw the name Florian.
He is a professional Troll, STOP POSTING HIS STUPID BULLSHIT!
How many lawsuits have been avoided because Google now has a formidable patent portfolio. Was the money spent on a nuclear arsenal wasted because there was no actual nuclear war?
Seattle judge, Microsoft is located in Redmond near ... (hint 15.3 miles away)
I sincerely hope it turns out to be a big one. Gotta take the profit out of speculation somehow.
“He’s not deformed, he’s just drunk!”
You do not take his words seriously. Google has bigger plans for Motorola. Some of which we would see later this year. They need Motorola for a possible situation where Samsung forks Android away. Patents are a big part of the deal but I doubt Google thought that they would recover their investments through royalties. Loads of people said acquiring YouTube was a mistake. Just give it a year or two. Microsoft paid 7 billion dollars for Skype. Around the same for aQuantive which they now admit was a bad move! Google paid same for Motorola Mobility and I am sure it is worth much more (IP and assets).
There is a lot more going on at Motorola Mobility then that lawsuit.
The Kruger Dunning explains most post on
It was all about patent defense from trolls like Microsoft, Apple, Oracle and others. Google bought Motorola for one porpoise: using its patent portfolio defensively.
New, bright and shiny, fish and clean -- all porpoise cleaner!
I'll see your senator, and I'll raise you two judges.
Yes, it is indeed another shining example of Betteridge's law in action.
You can hold down the "B" button for continuous firing.
Two important things are missed here:
1) Google mainly bought the patent portfolio for defensive purposes, not as revenue engines in themselves. The point of the suit is that MS wants to use the patents without paying for them. It's basically a move in the MS-vs-Android war.
2) The judgement doesn't pass the smell test. Read the articles over at Groklaw for the details, but the judge here is ruling that Motorola must accept patent pool rates for a pool they don't belong to, rather than negotiate rates using the methods of the group they are a member of. The whole proceeding has been slanted toward the home team (MS) the judgment seems to be very much an overreach, and probably won't survive appeal.
"My strength is as the strength of ten men, for I am wired to the eyeballs on espresso."
Hardware patents which require actual innovation, research, and significant funding aren't worth very much. Software patents, which seem to often be pulled out of one's behind without much thought, are worth billions of dollars and are strong enough to shut other companies down. Hardware patents? Pennies and no leverage against infringers. What a joke this patent system is. True innovation is left essentially unprotected, whereas trivial, obvious "inventions" get massive, industry crushing protection.
Google/Motorola Mobility might actually have to manufacture and sell a product to justify their capital expenditure! The horrors!
Also, I agree with posters above, I thought the patent portfolio aspect of the deal was a defensive one.
my, your, his/her/its, our, your, their
I'm, you're, he's/she's/it's, we're, you're, they're
Google bought Motorola for one porpoise: using its patent portfolio defensively.
baha if that was their goal then they should have bought a whale or penguin instead!
How can payments over a three year period on the patents alone, from one infringer no less, be worth more than the company was valued? We need more judges like these that just use common sense.
no comment
I've been following this site since before it had user accounts. It has really been a downhill ride in recent years. It is more and more just about click-whoring.
This article is a case in point. Slashdot editors must know by now that Florian Mueller is a professional troll who is paid to spew FUD about his clients' enemies in the media. That the editors do not care, since FUD articles apparently are click magnets, just makes me feel nauseous about coming back here.
There are so many more intelligent commentaries about this ruling that could have been posted instead.
Sergei: "Uhh, Larry?"
Larry: "Yes, Sergei?"
Sergei: "I, umm... I misclicked."
Larry: "On what?"
Sergei: "Motorola. I was browsing Corpazon and I accidentally clicked the 1-Click Buy button for Motorola."
Larry: "How much is that?"
Sergei: "12.5 bils..."
Larry: "Meh, just keep it. Not worth the bother to cancel that."
Sergei: "Alright... I guess we might be able to use them for some of our Android stuff."
*Larry shrugged*
Quoting Florean Mueller that is.
Ummm, then the answer should be no. Betteridge's Law
It might have been cheaper to sue everyone.
There are two types of people in the world: Those who crave closure
Reading comments from the executives of Google, that doesn't seem to be the case. It was a big part of the reason that they bought Motorola, but not the "one porpoise" (I didn't know Google would have bought another company for a sea animal with such a weird name as "using its patent portfolio defensively").
Google has been saying they're also just interested in being in the hardware business, and they see Motorola as one means to that end (from the looks of it, not the only). It looks like they're achieving their goal of breaking into hardware more via Motorola, even if they haven't made it profitable. Still probably cheaper than if they had started the whole thing from scratch. And Motorola hardware has a name for itself--whether that's good or bad to different people, it's still a name (personally, I love Motorola hardware and just happened to hate their software enough to not care about the hardware--it looks like Google's influence over the software might be fixing that issue in the future; others, of course, feel differently than I do). Google doesn't have a name for itself in direct hardware at all (aside from the Nexus line, which still isn't much of a name at all compared to practically everyone else in those fields), and they don't have to build that name because they got Motorola's name.
The whole purchase of Motorola makes more sense when you take the whole breaking into hardware aspect into account. It just has to be seen whether Motorola can actually make Google any money still.
It seems this submission is garbage.
By acquiring a company with huge net operating losses, Google is expected to reap $700 million a year in tax deductions from future profits each year through 2019. Google also will be able to immediately reduce its taxes by $1 billion due to Motorola Mobility's U.S. net operating loss, and by a further $700 million due to its foreign operating loss,
Source:
http://www.reuters.com/article/2011/08/31/us-motorolamobility-google-tax-idUSTRE77U1QX20110831
Unless I'm misunderstanding how lawsuits work, it seems to me that if Google's one purpose for purchasing Motorola Mobility was for defensive reasons, they would have halted the lawsuit against Microsoft after assuming control of MM.
If you can't convince them, convict them.
I disagree. With this one judgement it's a 7 year repayment term and when evaluating a company you generally look at it's 15 year P/E so they're doing pretty well I would say.
Google now has a handset maker in house, which gives them certain advantages in the mobile market beyond the patent portfolio.
Google's acquisition of Motorola Mobility is certainly more honest than Microsoft's ongoing stealth assimilation of Nokia.
If you're buying a company because you expect it to win big in IP lawsuits, you're doing a bad thing.
For every problem, there is at least one solution that is simple, neat, and wrong.
order of magnitude fail. aquisition was $12 billion, while the ruling has an annual value of $1.8 million. "Doh!" said eric schmidt.
You missed a few digits there. Google is getting 1.8 million (with an m) per year. They paid 12.5 billion (with a b) for Motorola. That puts the payback period at 7,000 years, which methinks is a little long.
I wouldn't call MS a patent troll, as they have a number of valid patents, and are willing to license for a reasonable fee.
Apple is not a troll either, but (IMHO), they seem to be all about scorched-earth tactics, so it is either the patent courts, or a bankruptcy court. Had they done like MS and said "we have patents and will sue to defend against them... but for $3/device, we will show you our patent portfolio, you take your pick, and we wish you the best", there would be a lot more innovation in the field. I'd probably go out on a limb and say that the residuals earned from Apple licensing in this manner would help their stock value, as it is money coming in even if they don't bother introducing an iPhone 5s or 6 this year.
Also, Motorola isn't just deadweight. They actually are the only phone maker which has file based encryption for SD cards. Yes, 4.0 and newer encrypt the /data partition with dm-crypt, and a lot of devices don't use a SD card, but there are some (the Samsung Galaxy S4) that have a good amount of onboard storage and a MicroSD card slot... and the data on the SD card needs some protection, even if it is using an EncFS-like filesystem which is on a file level (as opposed to filesystem/image like dm-crypt or LUKS.)
Motorola devices also have very good radios. I have a number of different brands of Android phones, and in general, Motorola's reception tends to be a notch above everyone else, and on par with whatever iPhone I am using.
Of course, there are killed technologies, such as the ability to attach a keyboard and monitor to an Atrix or Atrix 2, that would come in handy big time, especially with Citrix or other remote screen software.
Motorola has a lot of cool stuff... I just hope Google can get them off the encrypted bootloader kick. The locked bootloaders is the only reason I don't darken Moto's door when I look for a new Android phone.
Do you understand what the definition of a patent troll is...?
You do understand that Apple offered that to Samsung, and Samsung basically said FOAD?
At least, not a mistake for Motorola shareholders. They made out like a bandit on that deal.
This is a Florian Mueller article. It has no merit, no validity, and should be taken with the same grain of salt you'd take one of those folks who said the world would end in 12-12-2012.
For $12.5B you get:
$3.2 in cash
$2.35 billion from Motorola Home sale
$1B billion in real estate
some deferred tax assets.
patents
Looks like a far better deal than Apple and Microsoft got for $4.5 billion in Nortel patent purchase.
It was the royalties per se, but to protect the Android environment. If Apple had it's way they'd LOVE to kill Android. But they can't because Google hold mobile patents that could end Apple's iPhone and IOS product.
when evaluating a company you generally look at it's 15 year P/E
Then where did the meme come from that companies are so interested in making the next quarter look good at the expense of future years?
Then they phrased the question wrong!
Sleep your way to a whiter smile...date a dentist!
MS licenses at a reasonable fee? Like $10 per Android device? But refuses to pay RAND and other patents at $2 per device. Microsoft isn't even close to reasonable.
Hello, $12.0 billion writedown!
Sleep your way to a whiter smile...date a dentist!
Out of one side of their mouth they argue that Moto's couple of dollars/device is a totally outrageous licensing fee, given the % of a said device's capability relies on the patents involved (as if being able to play video and do wireless hardly matters to an Xbox) ... and out of the other side, negotiate - only under NDA, of course, because darkness fears the light - for on the order of $15 patent licensing fee for each Android devices, for what the temporarily-courageous Barnes & Noble leadership showed to be be patents that covered a ludicrously small part of said device's capability.
"Ahh! I see you're in that indeterminate Schrodinger state where - oh, uh
The FAT extended file names one is BS though, and that makes them a ton of money because no one will want to get into a legal fight with a corp that basically has bottomless pockets.
"if the best Google can earn from those patents is a few pennies-per-unit from its rivals' products, that may undermine the whole idea of paying $12.5 billion primarily for Motorola Mobility's intellectual-property portfolio".
In this day-and-age patent portfolios are bought so as to protect you from getting extorted by the other fella, as such it was a good buy.
AccountKiller
Doh! Indeed. Thank you for the correction - misread it.
Sure it was.
- let's buy some crap for 12bi so we don't have to pay a couple billions in patent licenses.
It was because they wanted this money and they lost. They literally gambled with company money.
Put a cap on market capitalization of Google to prevent these scams
Casteism
Well, Google certainly has the money... http://www.statista.com/topics/1001/google/chart/977/googles-amazing-growth/