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Google's Motorola Adventure: Stinging Defeat, Or Semi-Victory?
Nerval's Lobster writes "Google had previously sold Motorola's Home division for $2.4 billion. Combine that with yesterday's $2.91 billion sale of Motorola's remaining assets, subtract the $12.5 billion acquisition price for the company back in 2011, and Google's little smartphone adventure cost it roughly $7.1 billion even before you start throwing in expenses related to actual production, marketing, and personnel. That's a hefty chunk of change, but some analysts think the deal was ultimately a good one because it allowed Google to pick up patents, engineering talent, and insight into the mobile-device marketplace. It's debatable, however, whether those patents ultimately helped Android in the still-raging smartphone wars, and Google was slow to promote Motorola smartphones out of fear of irritating other Android manufacturers. At least Google can console itself with the thought that so many of its other acquisitions—including YouTube and DoubleClick—resulted in massive profits; but you can't hit a home run every time you step up to bat."
- $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
- $2.91B Moto's Mobility business sold in 2014
So the "patents, engineering talent, and insight into the mobile-device marketplace" cost $1.56B, not $7.1B
At least according to BGR
-3B Cash ,and -1B Tax breaks. That brings it down to 3.1B.
"To those who are overly cautious, everything is impossible. "
I've seen pretty convincing analysis today showing that, when you take the tax benefits of the deal and Motorola's cash position into account, Google is about $1bn to the good out of the deal, and it's retaining the patents. So it has bought a loss-making company for $12bn, broken it up into bits it can sell for around $5bn, got $3bn cash out of it, and about $6bn off its tax bill over the next six years, while gaining a large and important patent portfolio. Doesn't look look like a loss to me.
Slashdot - News for Nerds, Stuff that Matters, in ISO-8859-1 Has just realised that beta makes this signature redundant
Asset stripped and dumped. Thanks, Google.
Never email donotemail@WeAreSpammers.com
It doesn't matter if it doesn't matter. It's interesting and that's all that matters!
As far as I remember it was barely worth the massive bandwidth bills. But last time I heard about this subject was before the stupid video ads.
Stock holders do.
The summary tries to paint the picture that Google's acquisition and sale of Motorola was somehow not quite what Google had hoped for. When Google announced that they would buy Motorola Mobility on Aug 15 2011 Google closed at: $557.23. Today Google is at $1140. Between yesterday and today Google jumped > 3%. Obviously Google's stock price is influenced by many factors but the acquisition of Motorola has not seemed to deter the massive gains Google has experienced over the past 2 or 3 years.
$12 Billion sitting in a bank account really doesn't do anything for Google, and it makes investors upset. So they bought talent and patents, took what they wanted from Motorola and are now selling the left over parts. They are not taking a loss. This isn't MySpace being bought for $500 million and being sold for $35 million, it is idiotic to suggest this was a stinging defeat. It was a shrewd business decision.
they lost $7,000,000,000.00 on the "deal'. It was a pointless waste.
Except they didn't, and they got what they wanted out of it - the patent portfolio.
I got up early for Motorola's Black Friday sale to get a developer's edition Moto X. They launched three hours after their advertised start time. Once their systems came online, I got an order in in less than three minutes. I got an order confirmation and hours later Motorola staff was posting on social media, urging people to buy the model I got. The next day, they send me a cancellation notice saying they have no stock and they're not going to honor my order, despite offer and acceptance.
Google sucks at anything that requires anything that resembles customers service. Humans don't map/reduce well.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Here we go again...
Everything MS and Apple does is evil and they can't survive without leeching off of Google. Google is good and will lead us to the promise land where there will be milk and honey and Google will keep us safe from the bad MS and Apple.
Give it a frigging rest. We've seen time and time again that Google plays there games too. If it wasn't for you Fandroids they'd be on the heap of crap companies just like the rest.
At one time Google did some neat stuff for the man on the street and their employees. But Google grew up and we're starting to see how they're becoming like every other mature company on the planet.
The Moto X was actually an outstanding phone. I dumped my gs3 for one. I think the real end-game here was getting Samsung back in line. Motorola phones were selling enough units to raise alarms at Samsung. It's not like Samsung was in any danger of losing their stranglehold on android phone sales in the short term, but long-term with Google's backing it was only a matter of time until Motorola started taking significant chunks. End result: Samsung has supposedly agreed to dump it's custom UIs and custom applications and fully embrace the Play store and the Google ecosystem. It seems unlikely the timing is just a coincidence.
http://gigaom.com/2014/01/29/report-samsung-to-hold-the-touchwiz-on-future-android-devices/
Not surprising of course but zero mention of the employees of Motorola Mobility and Motorola Home who got whipsawed back and forth these last few years. I remember celebrating back when Google bought "us" a few years back...only to quickly see that they had zero interest in anything but the patents. So happy to have gotten out early.
If Google didn't buy them, someone else would now have those patents.
they valued the patents at $5.5 billion
One would be hard pressed to agree with that value given that EVERY time Google has tried to use them in court, Google lost...
It's nice to have patents for defensive purposes but it's not clear these are doing that much for them. People seem to be treating patents like piles of coal, ignoring that one persons pile of patents is quite different than another... it doesn't matter if you have 10,000 patents if your opponent has a key one you cannot work around.
As others have said, Google (and everyone) would have been far better off if they had spent $1b lobbying against software patents altogether.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I think they got rid of the handset division as fast as the tax law would allow. Take a look at this way.
Motorola (M) could get a higher price is they sold their business as a packaged deal, Motorola Mobility (MM). They got more bidders that way. (It’s not exactly what they did, but it was effectively what they did when they spun off that division.)
Google wanted the patents but not the hardware division for the reason you mentioned but they had to buy both. They wanted to get rid of it as fast as possible.
Assuming MM was spun off from M in a tax free spin off, one normally has to wait about 2 years before one can sell off a division. If it was sold off before then it would trigger a big tax bill for MM. Most spin off require the spun off division to pay their parent’s tax bill if they are bought out.
So we wait 2 years and 6 months and guess what happens – Google sells off the handset division.