GOOG down by 3% , MMI up by 60%
GOOG’s move is very aggressive, and looks suicidal ! …
- Before this buy-out MMI was going to sue its Android cousins
- GOOG’s buy-out places it in direct competition with SAMSUNG & HTC / LG
- How GOOG is going to support Android for its competitors
- SAMSUNG, HTC / LG may abandon Android in favor of other OS’s (Win and others)
The Patent war will be raging ! …
IMHO AAPL should buy-out SAMSUNG and sue GOOG directly as opposed to indirectly through MMI, and continue to sue HTC
caruso2323 12:35 pm on August 15, 2011 278 days ago Reply
Google Follows Apple Into Hardware, But With Weak Hand
Posted: August 15, 2011 at 7:46 am
Google (NASDAQ: GOOG) will buy mediocre handset firm Motorola Mobility (NYSE: MMI). It is probably a play to compete with Apple. The difference is that Motorola has a relatively weak line of products, particularly compared with market leaders HTC, Samsung, and LG. At least most Motorola phones run Google’s Android OS.
The deal looks a bit like the joint venture between smartphone also-ran Nokia (NYSE: NOK) and Microsoft (NASDAQ: MSFT). Microsoft did not make an outright acquisition, but the arrangement is close. It gives Nokia an operating system other than its ancient Symbian product, and marketing dollars from Redmond. Microsoft gets a platform for its Windows wireless OS product, although the size of the Nokia platform is shrinking at an unusually rapid pace.
Motorola’s best years are far behind–back half a decade to its successful RAZR product. Motorola was never able to replace it as the cellphone product aged.
Perhaps the most stunning thing about the Google buyout of Motorola is the price. Google will pay $40 a share–$12.5 billion. That is a 63% premium. Before the acquisition, Motorola’s stock had fallen from $36.34 in February to its present $24.50–down 20%.
Google must see something in Motorola that no other company did. There were no other suitors knocking on the door
Douglas A. McIntyre
caruso2323 12:42 pm on August 15, 2011 278 days ago Reply
GOOG paid 12.5B for a barely profitable Cell Maker, which owns patents … This move looks to me a desperate move by GOOG to monetize Android at a time that its platform is being sued by Oracle, and by Apple…
Samsung, HTC, LG will be faced with added expenses :
1) An Android Tax
2) Potential AAPL Royalty fees
3) Potential MSFT royalty fees (as already paid by HTC)
Nicu 12:58 pm on August 15, 2011 278 days ago Reply
desperate times call for desperate moves; those lucky rookies will never cease to amaze us
caruso2323 1:14 pm on August 15, 2011 278 days ago Reply
I read somewhere that GOOG may be forced to give a specific $ figure about its $ revenues generated by adds on SmartPhone platforms …
BTW I thin AAPL will distance itself from GOOG maps now that GOOG has distinguished itself as a DIRECT COMPETITOR … Look for AAPL to promote BING over GOOG search
rastard 1:42 pm on August 15, 2011 278 days ago Reply
“I read somewhere that GOOG may be forced to give a specific $ figure about its $ revenues generated by adds on SmartPhone platforms …”
Oracle asked for that recently as part of their lawsuit. The legal analysts covering the case seem to think it unlikely they’ll be granted the info, as it’s too far reaching. But who knows — will be interesting to see.
“BTW I thin AAPL will distance itself from GOOG maps”
Old news. There have been reports for the past year of Apple developing their own mapping software/products in-house.
“now that GOOG has distinguished itself as a DIRECT COMPETITOR”
Having their own hardware line via the MMI acquisition will indeed make Google more of a “direct competitor” than they’ve been to date, but to me they still don’t seem like they really are. It just doesn’t seem like Google’s MO to try to make $ off of handset/tablet sales. It wouldn’t surprise me to see Google keep the patents and sell or otherwise spin-off the rest of MMI.
caruso2323 1:10 pm on August 15, 2011 278 days ago Reply
A real gamble to GOOG that may cost it : 2.5B in case it gets blocked
———————-
AUGUST 15, 2011, 8:53 AM ET
Google-Motorola Deal: Signs of Regulatory Worries
By Shira Ovide
AFP/Getty Images
Before we get all excited about Google’s biggest acquisition ever, the $12.5 billion planned purchase of phone-handset maker Motorola Mobility, let’s pause and think about Washington.
Remember that Google is right in the beginnings of a government investigation into whether the company abuses its market lead in online search to unfairly crush the competition. No one thinks the government is going to force Google to break up, à la Ma Bell back in the day.
But already Google has had troubled pushing through acquisitions because the government is keeping a close eye on any Bigfoot signs from the company. Google got poked and prodded in its purchase of flight-software company ITA Software. Groupon last year rejected a potential $6 billion takeover from Google in part because of expectations Google’s role in the acquisition could have bogged the two companies down in antitrust limbo for more than a year.
And now our Journal colleagues are reporting Google’s planned deal for Motorola Mobility has a $2.5 billion reverse termination fee. In English, that means if Google can’t push the acquisition across the finish line — including, presumably, because the government won’t allow the deal to happen — Google would owe Motorola $2.5 billion. That’s an unusually large 20% fee. Typically, termination fees tend to be roughly 3% of the value of a deal or higher.
Looks like Motorola, like Groupon before it, is worried that Washington won’t let Google close the deal
rastard 6:43 am on August 20, 2011 273 days ago Reply
I don’t know if I buy it, but here’s a different perspective on the astronomical reverse termination fee:
Behind Google’s Huge Breakup Fee in Motorola Deal
http://dealbook.nytimes.com/2011/08/18/behind-googles-huge-breakup-fee-in-motorola-deal/
rastard 1:30 pm on August 15, 2011 278 days ago Reply
- “GOOG’s move is very aggressive, and looks suicidal ! …”
Seems to me that this deal was wholly precipitated to acquire Motorola’s 17000 patents. Nortel’s 6000 patents sold for $4.5B (the math works out to $750K per patent) At $12.5B, Google’s getting 17000 patents at $735K a piece. Yeah, I recognize that it isn’t actually as simple as that, but the math is kinda interesting (for better or worse, Google gets the company along with the patent portfolio for that price).
- “Before this buy-out MMI was going to sue its Android cousins”
Want to take odds on whether that’s still going to happen?
- “GOOG’s buy-out places it in direct competition with SAMSUNG & HTC / LG”
Looks like not. Per http://online.wsj.com/article/SB10001424053111903392904576509953821437960.html, “Google will run Motorola Mobility as a separate business that will remain a licensee of Android.” Guess it all depends on how separate “separate” actually is.
- “How GOOG is going to support Android for its competitors”
“Google also said Android will remain an open platform.”
- “SAMSUNG, HTC / LG may abandon Android in favor of other OS’s (Win and others)”
Perhaps (although that seems like wishful thinking on your part). You do realize though, that Samsung already has their own mobile OS — which recently surpassed Windows in market share (http://www.pcmag.com/article2/0,2817,2390925,00.asp). Seems unlikely that they’d have any reason to adopt Windows mobile.
- “The Patent war will be raging ! …”
Yes, looks that way. I think it will be interesting to see if Google still adheres to its mantra that patent lawsuits are evil. IIRC, as of a year ago, Apple only had ~3000 total patents, which is far fewer than the 17000 Google just picked up. Certainly, Apple has obtained more since then (and I’m not sure how to count the Nortel 6000 since Apple isn’t the sole owner), but if Google does evilly try to litigate, it seems like they could cause Apple enough trouble for all of us consumers to eventually see higher smartphone prices.
This does, however, seem to make it likely that the DOJ/FTCs concerns over the Nortel patent auction results become moot.
- “IMHO AAPL should buy-out SAMSUNG”
*Sigh* Where do you come up with this stuff. Even Apple doesn’t have that much cash. Samsung’s EV is apparently around $78B USD, and using the 60% premium Google just paid for MMI as a ballpark (I have no idea what the right number would actually be, but that % seems as good as any for this made-up exercise), Apple would need to fork out $126B to buy Samsung. They could, of course, buy only Samsung’s mobile assets, or do a cash+stock deal — but why would they bother? The potential return here would seem to be several orders of magnitude off from that cost.
Just out of curiosity, why suicidal? (please pardon the question if your prior post already contained all of your reasoning). Seems recently like the position of nearly everyone here has been that Android is soon to die primarily because of Google’s lack of a patent portfolio. Now that Google has actually gone and done something about it, you’re saying it’s “suicidal”.
Btw, still think that Google is going to abandon Android in 2012?
caruso2323 11:53 pm on August 15, 2011 278 days ago Reply
Rastard,
Why suicidal ? Simply Because :
1) GOOG IMHO appears to have paid unduly a 60% premium with the 12.5B take-over… MMI previously rose up to $27.70 from about $22 by over 25% on July 21, following Icahn’s urge to use MMI’s patents on 4G … That is how the market valued these patents ! …
So Rastard, what do you think GOOG is getting for paying that extra $12 on speculative patents on 4G smartPhones that MMI is having a tough time manufacturing ? What is the worth of a company which is barely profitable ? while having difficulty competing with Samsung and HTC… Were you not able to get a clue by MMI’s plan on suing Samsung and HTC ? … What patents were they planning to invoke : 4G of course !
Jul 21, 2011 22.54 27.70 22.32 25.19 25,084,193
2) “The troubles saddled Motorola Mobility with a $56 million loss in its latest quarter, sinking the company’s stock price to one of its lowest points since its January spinoff from the old Motorola Inc. The remaining part of that company now runs as Motorola Solutions Inc. In contrast, Google earned $2.5 billion in its most recent quarter ending in June.”
3) GOOG’s cash reserves are about $39 B and that is not NET as GOOG borrowed some 2B recently… Compare these with AAPL’s actual 76B and soon to be about 90B by October …
GOOG’s is slowly but surely running out of dry-powder in its capacity of moving the needle.
It is getting weaker as it is now forced to spend $ in a defensive strategy, spreading out getting distracted by legal battles, improvising upgrades to its Android platform while competing with Amazon, FaceBook, Apple, MicroSoft and a bunch of other engine research companies… It does not seem to be expanding geographically and missed out big time on Asia…
While GOOG is on the defensive, AAPL is positioning itself for some major acquisition that would further consolidate its grip on its profit engine : The iPhone, and on its revenue engine : The iPad.
IMHO that acquisition maybe in the manufacturing field for its vital parts : LCD panels, ARM CPU’s , SDRAM, batteries etc… I think that Apple would not want to depend on external suppliers.
The Japanese earth quake, Tsumani, Meltdown etc… Further more , they may want to buy out Foxconn … If Foxconn is planning to deploy 1-2 Millions robots to assemble some processes would you not think that given some incentives from the U.S. gov. it would not want to build some factories say in Texas or California ? Close enough to the Mexican border, so that complimentary processes involving cheap labor as in Mexico ?
Of course all the above is my OWN PURE SPECULATION … But one thing is sure : Apple is poised to move the needle BIG TIME while being focused on its business, unlike Google…
And I think that Shmidt would have blocked that buy-out ! …
—————–
Every one though that Android was a free open platform… All of a sudden :
A) A price of 12.5B
B) This acquisition does not solve the following problems :
- AAPL suit against MMI in the EU… Expect same to be filed VERY SOON in the U.S. the cradle of MMI’s products…
- Oracle’s suit against the Android platform, that was strengthened by GOOG’s confirmed admission that they “borrowed” the code
- AAPL’s determination to block the Android Tablets (Samsung’s Galaxy 1, and soon to follow the Galaxy 2 in EU, Korea, and soon in the U.S.) as well as the Xoom …
- MSFT will continue its on-slaught on the Androids … They got HTC/MMI , they will go after Samsung very soon
- AAPL IMHO may now focus its attack now to GOOG
- Assuming that GOOG does not spin-off MMI’s smartPhones business minus its patents… “The deal will test Page’s ability to avoid a clash of cultures while he is still learning the nuances of the CEO job, which he took only four and a half months ago. With 19,000 workers, Motorola Mobility’s payroll isn’t that much smaller than Google’s 28,800.”
- Assuming the same as above …. How can you assume that GOOG+MMI can come out with innovative products ? … Motorola Mobility, based in Libertyville, Ill., has been struggling to come up with a product that has mass-market appeal since it introduced the Razr cellphone in 2005.
They did thanks to its integration of iTunes playback of mp3 music…
- The company had some success with the Droid, one of the first phones to run on Android, but it now ranks a distant eighth in the smartphone market, with 4.4 million units shipped in the second quarter, according to research firm Canaccord Genuity. By comparison, the market-leading iPhone shipped about 20 million.
- The recent attempt to counter the iPad hasn’t paid off for Motorola Mobility, either. In an effort to drum up more demand, the company recently cut the price on the Wi-Fi-only version of its tablet, the Xoom, to $499 from $599. That is optimistic since they can soon be banned all together … And That comes on the heels of HP’s dropping its DOA’S 7″ tablet from $499 to $399…
———————–
But there are more fundamental questions about GOOG :
1) Just how much profits are derived from its mobile search platform (including those piggy-backed on AAPL’s iOs that has been tolerated in a so-far NON WAR times)… Oracle needs to be given that piece of information if it is to be nice with Google and charge licensing fees for “borrowing’ its code … Otherwise you can bet your shirt that Oracle will ask for a BAN of ALL ANDROID products …
2) What are the sources for a 30% future growth for Google ?
caruso2323 1:38 am on August 16, 2011 278 days ago Reply
The But more fundamental questions about GOOG future’s growth, may be projected from the past :
- 2007 : 48% (WOW good old times)
- 2008 : 25% (Upss … But it is the beginning of the recession stupid !)
- 2009 : 19% ( Upss .. But it is the end of the recession stupid !)
- 2010 : 28% ( YAY ! … The economy is growing )
- 2011 : 20% ( Upsss… The economy is growing slower than expected)
What could GOOG’s growth be assuming a recession happens in 2012 (not so likely) or in 2013 (much more likely) ? … I’d say 8%-10% AT BEST assuming that GOOG lays off thousands of its employees and get a handle on its extravaganzas !…
Someone please post AAPL’S Yearly growth rate !
Thanks
caruso2323 6:03 pm on August 17, 2011 276 days ago Reply
I am no longer the one thinking that ANDROID will be gone in two years from now … Symco who has earned the greatest respect among the pro’s think likewise :
Apple 2.0Mac news from outside the reality distortion field
4 comments
Motoroogle: The long view
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By Philip Elmer-DeWitt August 17, 2011: 1:12 PM ET
In the Harvard Business Review and a 50-minute podcast, a deep dive into what it means
Horace Dediu — the Harvard-trained analyst writes the influential Asymco blog — was studying the mobile phone market for Nokia (NOK) in 2005 when Google (GOOG) bought Android, primarily as a defense against the perceived threat that Microsoft’s (MSFT) was about to do to cellular telephony what it did to desktop computing.
The real threat, it turned out, was Apple’s (AAPL) iPhone, which came along two years later from a different direction.
That’s the context, Dediu maintains, in which to try to make sense of Google’s proposed acquisition of Motorola Mobility (MMI).
Dediue took a crack at making sense of the deal in two venues Tuesday — in a piece published by the Harvard Business Review and in a 50-minute “Critical Path” podcast on the 5by5 Network. Together, the two piece constitute the deepest dive we’ve seen — and we’ve seen plenty — into the meaning of the $12.5 billion merger.
Dediu’s conclusion: The deal doesn’t make sense. Not as a pure patent play. Not as a entry into cell phone manufacturing. And not as a combination of the two.
“The big secret here,” he concludes in his Critical Path piece, “is that I don’t think Google knows what it wants to do yet.”
Google’s original strategy, he says, was to disrupt Microsoft by giving away what Redmond was selling — a mobile phone operating system — and making money by providing online services (primarily advertising).
But Google was still using Microsoft’s modular approach, treating the OS, devices, and services as three separate businesses. Unfortunately for the licensees of Microsoft Windows Mobile, that made for an unbearably clunky smartphone.
Apple’s breakthrough — like Research in Motion’s (RIMM) before it — was to build an integrated device that offered users a smooth, seamless experience.
So Google went back to the drawing board and redesigned Android to mimic the iPhone’s look and feel. But it was still going modular — not integrated like Apple. It was giving away the OS, letting others — Samsung, LG, HTC, Motorola etc. — build the devices that ran it, and hoping to somehow make money selling mobile services.
The money in mobile services hasn’t yet materialized and the modular approach opened several “cracks” in the Android strategy that Dediu enumerates in the Harvard Business Review:
“Issues with intellectual property in Android caused some licensees to have to pay royalties to patent holders, increasing the cost. Fragmentation took hold where some versions of the software were used by some licensees on some products without the option or incentive to upgrade. Finally, some vendors modified the software resulting in missing features or inconsistent user experiences — even to the extent that Google’s own services were omitted.”
The 24,000 or so patents and patents pending that Google would acquire if the Motorola deal goes through might help protect its licensees on the intellectual property front — although as FOSS Patents’ Florian Mueller points out owning those patents didn’t protect Motorola from getting violently sued by Apple and Microsoft.
Trying to compete with its licensees by building its own smartphones, however, creates even bigger problems — as Nokia learned when its Symbian partners eventually abandoned that ship.
Dediu concludes that the Motorola deal was hastily put together and not very well thought out. It’s “reactionary, not proactive,” he says. “It’s playing chess not looking five moves ahead but looking one move ahead, which is not a very good way to play the game.”
The break-up cost of the proposed acquisition — the price Google would have to pay Motorola if it falls through — is an extraordinary $2.5 billion, which suggests that someone knew that the deal had its risks.
In the end, Dediu repeats doubts he has expressed before about how committed Google management really is to Android’s long-term prospects.
“Android,” he says at one point in 5by5 podcast. “could cease to exist within two years.”
We’ll see.
rastard 2:31 am on August 16, 2011 278 days ago Reply
[TL; DR, and Nicu just asked met to write shorter responses, so I won't bother to answer every point in your post.]
1) “GOOG IMHO appears to have paid unduly a 60% premium with the 12.5B take-over”
There are two separate factors here: 1) whether MMI (and it’s patents) were worth buying at all, and 2) whether $12.5B was a worthwhile price. I’m not going to disagree with you that the acquisition wasn’t worth $12.5B — I don’t know that and wouldn’t even know where to start in calculating it. For argument’s sake though, let’s say that Google did overpay $5-6B or so — that’s hardly “suicidal” for Google.
Regarding the 2nd factor about whether MMI’s 17000 patents are useful — your [completely unsupported] assertion that Motorola’s portfolio is obsolete and completely worthless makes me think that you haven’t been following the patent wars at all. The battles have never about one killer patent, and always about who has the largest arsenal. Patent wars tend to drag out for years, most get settled in cross-licensing agreements, and there hasn’t been a single smartphone infringement suit that’s been won recently that’s been based on the latest and greatest technology. Relatedly, did you actually think that Nortel’s 6000 patents that Apple et al just bought were all current patents?
2) “While GOOG is on the defensive, AAPL is positioning itself for some major acquisition that would further consolidate its grip on its profit engine”
You surprisingly, seem to have a fundamental lack of understanding about Apple’s acquisition strategy. Apple hasn’t and doesn’t make major acquisitions. On what basis are you now so blithely asserting that Apple is going to break completely with its history to do so now? Oh wait — I forgot — you think they should (and could) buy Samsung.
3) ““The troubles saddled Motorola Mobility with a $56 million loss in its latest quarter”
$56M is a rounding error for Google — far from a loss that is “suicidal”. Further, MMI’s operating success/failure, I’d argue, is largely irrelevant because Google didn’t buy them for it.
4) “Otherwise you can bet your shirt that Oracle will ask for a BAN of ALL ANDROID products”
Like with all patent suits, Oracle can *ask* for whatever they want. Getting what they ask is a different story, and I haven’t yet noticed *anyone* but you making the assertion that Oracle will actually do that. I think you need to go back on your meds.
caruso2323 3:05 am on August 16, 2011 277 days ago Reply
Rastard , The one who needs med is no one else than yourself … You will probably be compelled to use them as your investments in GOOG SHRINK ! …
1) I never said that this move is SUICIDAL because of the 12.5B … But mainly because instead of forging alliances they appear to be breaking them .. Their argument about cash is they don’t give a fack about you and about its shareholders… That cash is supposed to belong to you and not to try fantasies …
They say money is cheap ! That having cash is no big deal ! …
2) One one hand you say that -50M is a rounding error for GOOG … and 6B extra may sound no big deal to you … LOL … Last time they made a simple adjustment of 1B , because they did not account for a settlement with the DOJ …
3) If I was you Rastard I would be worried about this frivolous way of running a business … I would be equally worried not having a clue about their business plan, their business strategy …
Good Luck Rastard … From now on I will be ignoring your posts because you are in a state of TOTAL DENIAL
rastard 9:19 am on August 16, 2011 277 days ago
“You will probably be compelled to use them as your investments in GOOG SHRINK !”
Thanks for worrying about me. It’s touching. No need to though, as my AAPL holdings outweigh my GOOG holdings, so I’ll be doing fine no matter what happens.
“But mainly because instead of forging alliances they appear to be breaking them”
I understand why you keep saying that, I simply disagree with you wrt to the MMI acquisition. I’ve already stated why in several posts, so I won’t repeat.
For the record though, what are the alliances you think that Google has forged to date, and which alliances do you think that Google has broken? Similarly, what alliances has Apple forged, and which alliances have they broken?
“Their argument about cash is they don’t give a fack about you and about its shareholders”
Their argument is completely consistent with their founders statement from their IPO letter:
“Google is not a conventional company. We do not intend to become one. Throughout Google’s evolution as a privately held company, we have managed Google differently.”
and
“If opportunities arise that might cause us to sacrifice short term results but are in the best long term interest of our shareholders, we will take those opportunities. We will have the fortitude to do this. We would request that our shareholders take the long term view.”
Shareholders *should* have read that before investing in Google, to know what kind of company they were buying. As a GOOG shareholder, I’m completely aware that short-term cash/profits are *not* the top priority of Google. IMO, it’s not Google’s duty to give a fack about those shareholders who didn’t.
“and 6B extra may sound no big deal to you”
I never said that. While $50M is a rounding error to them, $6B is a lot of money even to Google (or Apple). I simply said that $6B being overpaid for MMI isn’t “suicidal” for Google.
“I would be equally worried not having a clue about their business plan, their business strategy ”
If I felt they didn’t have a clue, I would be worried. If I felt *I* didn’t have a clue what their strategy might be, I would as well. I don’t feel that though, so I’m not. Using this acquisition as an example, I’ve asserted:
1) Google’s core competency is to make money off of Ads, from which it makes lots of money.
2) MMI’s core competency has been to design, manufacture, and sell mobile devices, from which it has actually made comparatively little money.
3) Android’s rapid adoption has been primarily attributable to having dozens of OHA partners building and selling Android devices instead of Google owning the full HW/SW ecosystem (ala Apple)
4) Because of 1, 2, & 3, it seems obvious that Google will make more through Ad sales via the full Android ecosystem that it could possibly make from MMI’s device sales.
5) Thus, Google bought MMI to build up (and/or protect) that Android ads revenue stream, not to make money off of device sales.
6) the only way for them to do that is to offer the protection of MMI’s patent portfolio to their partners.
As a business strategy, this makes complete sense to me — especially since for years they (and others) have been saying that mobile is the future of online advertising. You’re welcome to disagree.
As of last October (when only 200K devices were being activated per day), Android was already on a run rate to generate over $1B in mobile Ad revenue (http://blogs.computerworld.com/17169/android_brings_in_1_billion_a_year_to_google_helps_drive_soaring_profits). Today Android is allegedly activating nearly 3x that many. *If* ad revenue growth has been comparable to Android user growth, that would put Android-generated Ad revenue at ~ $2.75B. Nearly 200% growth in less than a year. Seems like a good strategy/plan to me.
That you keep asserting that Google doesn’t have a strategy/plan — simply because you’re not capable of understanding it — seems to be nothing more than a sign of your immaturity…
rastard 9:21 am on August 16, 2011 277 days ago
Typo should have read: “Nearly 300% growth in less than a year. Seems like a good strategy/plan to me.”
Nicu 2:46 pm on August 15, 2011 278 days ago Reply
“naive at best”
http://www.asymco.com/2011/08/15/the-perils-of-licensing-to-your-competitors/
conshmillo 2:52 pm on August 15, 2011 278 days ago Reply
There you have it. Now how would you feel right now if you were one of those hardware makers that instead of developing their own os platform, they were spreading gospel of android. What I see is a picture of guy with large shiny knife in bloody wound in his back – courtesy of “do no evil” Google. What Google just did is equivalent of Microsoft buying Dell in old days. Deal was Microsoft makes os and we make hardware.
@rastard Google will never give up android – Google will get killed because of android! You are watching corporate suicide in slow motion.
rastard 3:25 pm on August 15, 2011 278 days ago Reply
“@rastard Google will never give up android”
Tell that to @caruso, who I believe is the one who kept suggesting that Google was going to abandon Android in 2012 (something about expiration of agreements or commitments or something).
“Google will get killed because of android! You are watching corporate suicide in slow motion.”
The vast bulk of Google’s revenue, expenses, and profits still comes from core websearch and advertising. I’m having a hard time understanding your position — even if Google’s Android ventures completely fail, how would that kill Google (i.e. how would that take down Google’s core competencies)?
“What I see is a picture of guy with large shiny knife in bloody wound in his back – courtesy of “do no evil” Google”
I don’t see that at all. Two reasons:
The only reason Android has been successful has been because of it’s widespread adoption across multiple vendor platforms. There’s no way that Google will make as much profit on MMI’s device sales as they do on advertising via the entire Android ecosystem (keep in mind that device sales aren’t a core competency of Google — Ads are, and that Moto itself isn’t making much on devices despite it being their competency). Moto alone doesn’t have enough share for the Android ecosystem to be solely Moto, so Google has a vested interest in protecting all of the other Android licensees to ensure that Android fosters.
Further, it seems to me that Google [probably over?]paid for MMI so as to secure their massive patent portfolio. Google itself doesn’t actually need the portfolio, as no one other than Oracle has sued Google (and that suit is about Java, not mobile technology). The companies that *do* need the portfolio’s protection are all of the other manufacturers who produce Android devices. I’m expecting that Google will be offering all of those manufacturers it’s protection — perhaps for some fees, but more likely simply to ensure their continued adoption of Android (i.e. they’d provide licenses to those Moto patents solely for use on Android devices).
“Company executives spoke with the top five Android licensees prior to this deal, and according to Google, “they showed enthusiastic support for the deal.”” (http://www.medianama.com/2011/08/223-why-google-is-buying-motorola-mobility-notes-from-the-concall/). Could be made up (or just lip service on the part of those companies), but I can’t see why Google would lie about that. The other Android licensees would themselves know it isn’t true and would have no reason not to throw Google under a bus if Google is indeed screwing them.
rastard 5:40 pm on August 15, 2011 278 days ago Reply
http://www.google.com/press/motorola/quotes/
1) “Well, it does appear that “Company executives spoke with the top five Android licensees prior to this deal, and according to Google, “they showed enthusiastic support for the deal.”” is true (as an aside: I’m curious who the 5th licensee was and why they aren’t quoted).
2) And this perhaps seems to support my expectation that Google is intending to use MMI’s large patent portfolio to protect its other Android partners.
3) But I find it incredibly funny that the 4 quoted executives all somehow independently came up with the exact same statements completely on their own.
“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.”
– J.K. Shin, President, Samsung, Mobile Communications Division
“I welcome Google‘s commitment to defending Android and its partners.”
– Bert Nordberg, President & CEO, Sony Ericsson
“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”
– Peter Chou, CEO, HTC Corp.
“We welcome Google‘s commitment to defending Android and its partners.”
– Jong-Seok Park, Ph.D, President & CEO, LG Electronics Mobile Communications Company
Zee 6:03 pm on August 15, 2011 278 days ago Reply
@rastardo. Android’s vendors are oriented towards consumers; MMI can maintain its HW relevance w/o conflict by focusing its efforts competitively against :
http://us.blackberry.com/ataglance/security/certifications.jsp
caruso2323 1:49 am on August 16, 2011 278 days ago Reply
Rastard, Your point is well taken … Yes I predicted that GOOG would dump Android … I did so because I assumed that they were smart enough not to get into this “moving sand” shit of patents… Instead of moving ahead they are digging in trenches … An expensive defensive move that adds a lot of uncertainty which will be taken advantage of by Microsoft and possibly by HP ! …
By the time, GOOG puts its hands on those patents (apparently not sooner than 9 months from now) these patents may be obsolete as new technologies will be required to triple the frequency spectrum… I understand that the future lies in LTE technology not so much the 4g , someone please enlighten me about that …
JPWatkins 3:18 pm on August 15, 2011 278 days ago Reply
The sheer number of patents Motorola has sounds impressive. But So does the sheer number of phones Nokia sells. I suspect Motorola’s patent portfolio is long in the tooth, old school, and mostly irrelevant. Motorola is failing (despite an enormous but shrinking and aging pool of talented people) and will not mesh with Google. Google has zero hardware, and demonstrably very limited OS capability. Motorola will not provide this. Besides their obvious superiority in software engineering and design, production planning, design, and engineering are Apple’s lesser recognized forte. Google moving into hardware would just accelerate their decline. This also does noting to alleviate their problems with Oracle.
Frankly, I don’t see this deal getting a pass from regulators anyway. If it does go through, good for my friends that work at Motorola—it gives them more time to transition to better jobs elsewhere.
rastard 3:32 pm on August 15, 2011 278 days ago Reply
“I suspect Motorola’s patent portfolio is long in the tooth, old school, and mostly irrelevant. ”
Aside from your hating Google, is there some basis upon which you believe that? IIRC, the successful infringement victory that Apple recently won involved 4? patents that were all >=10 years old, and not even related to smartphone technology.
“Frankly, I don’t see this deal getting a pass from regulators anyway.”
Why not? What would be their basis for objection?
JPWatkins 3:09 am on August 16, 2011 277 days ago Reply
“Aside from your hating Google . . . [Nice projection. Is "asshole" your only mode of communication?)]
I live in Chicago.
Worked for Moto doing design research.
Have friends that work at Moto now.
I read the newspaper (Moto’s pretty big in Chicago.)
I have a brain cell or two.
Believe me Moto is pretty dysfunctional.
“Why not? What would be their basis for objection?”
Needles reduction of domestic competitors in the space will go from Apple Moto and Google (software only) to just Apple and Google. Moto’s (admittedly pathetic) efforts will disappear and become part of the Android monoculture. Does that enhance or harm the space for domestic interests? Personally I hope it goes through. It will enhance my friends stock options and it might bring some temporary benefits to the Chicago area (but I don’t think it will go anywhere.)
rastard 11:10 am on August 16, 2011 277 days ago Reply
“Aside from your hating Google . . . [Nice projection. Is "asshole" your only mode of communication?)]”
Ok, be honest. Is “JP hates Google” actually an untrue statement? If it is, I’m mistaken and I apologize.
“Needles reduction of domestic competitors in the space will go from Apple Moto and Google”
There’s no evidence at this point to support your assertion that this merger will result in reduction of domestic (or otherwise) competitors. Google’s on-the-record statements about the acquisition (as well as those [scripted] statements of all the other Android licensees) have in fact, been exactly the opposite. Until one/some of them comes out saying “we think this reduces competition”, there’s no basis for the FTC/DOJ to oppose *this* particular acquisition.
JPWatkins 5:03 pm on August 16, 2011 277 days ago
You seem to always project motives, positions, opinions, and emotions onto whoever you respond to. Also you’re tone, no matter what the subject or who you are responding to, is often abusive in some way. You seem to think you are never wrong, always right, and the only one with a valid opinion. You seem to take relish in these things. I can’t imagine why anyone takes offense.
I dont hate Google. My home page is set to “Google Advanced search.”
I do dislike many things about Google though. I particularly dislike their business model, and I do think their leadership, like Microsoft’s is particularly unethical and hypocritical. I have owned both MSFT and GOOG, but have not owned Microsoft since some time after the big dividend and have not owned Google for several years now.
Decisions on mergers are not supposed to be based on the perceptions of competitors or partners. They are supposed to be made on the basis of their impact on the market, competition, legal considerations, and on the public good. Google cannibalizing one of only two domestic handset manufacturers doesn’t seem like a good thing to me, no matter what Wall Street analysts” or Google business partners might think. None the less, there has been a very “pro-business” skew by regulators for many years now, and the downturn has only accentuated it.
rastard 8:45 am on August 17, 2011 276 days ago Reply
“Nice projection. Is “asshole” your only mode of communication?”
http://www.notquitewrong.com/rosscottinc/2011/08/03/so-youre-mad-about-something-on-the-internet/
Nicu 9:49 am on August 17, 2011 276 days ago
you know what is the link between arguing on the net and the special olympics?
even if you win, you’re still retarded
rastard 1:59 pm on August 17, 2011 276 days ago
Good one!
GotWake 4:41 pm on August 15, 2011 278 days ago Reply
Everyone (including rastard) had some good points. I think it will be interesting to see how this plays out. If they bought MMI purely for the patents and plan to protect the other handset makers, then they have essentially killed off MMI. If Google plans to revive MMI, then I don’t see how they will be able to do that without alienating the other handset makers.
Nicu 6:02 pm on August 15, 2011 278 days ago Reply
wow, rastard, a real fandroid with mouth foaming and all; here is some more food for thought
http://www.businessinsider.com/google-motorola-industry-2011-8?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2Falleyinsider%2Fsilicon_alley_insider+%28Silicon+Alley+Insider%29
if you could write short, to the object, and not so obviously faith driven posts, I could try to read and respond to your points
Nicu 6:08 pm on August 15, 2011 278 days ago Reply
but, but, but … it’s OPEN
http://fosspatents.blogspot.com/2011/08/most-android-vendors-lost-their-linux.html
ROFL
Nicu 6:13 pm on August 15, 2011 278 days ago Reply
I despise a bit MDN lately as they have a rare form of fanboism, but I have to quote them : Goole will rue the day they decided to work against Apple rather than with them
it seems one share of Apple will be more valuable than one GOOG much sooner than thought, as they work actively towards sabotaging their own platform; adding 60% more employees for losing money on handsets, and that for “only” their earnings for FIVE quarters
SB 8:17 pm on August 15, 2011 278 days ago Reply
I do not find rastard’s posts to be fandroidish at all – quite the opposite, many of his points are well reasoned and factually supported (or at least supported by references). I welcome his input.
This from someone who does not yet own a “smart” phone and who owns both Apple and Google stock.
Nicu 8:45 pm on August 15, 2011 278 days ago Reply
OK, then I’ll give another try to read his long comments after I get some rest
rastard 2:41 am on August 16, 2011 278 days ago Reply
@nicu – You typically provide reasoned arguments and analysis, so I’m rather surprised to see you resorting to an ad hominem attack instead of actually debating the merits. I expect better of you.
Yarow’s Business Insider article you cited (http://www.businessinsider.com/google-motorola-industry-2011-8?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2Falleyinsider%2Fsilicon_alley_insider+%28Silicon+Alley+Insider%29) is probably the least-well-thought out of the negative articles i’ve seen about the acquisition, and I’ve largely addressed all of his points in the prior post I wrote (that you apparently didn’t feel was worth reading). So that you don’t have to do it now, I’ll jump to the bottom line where Yarow rhetorically asks:
“It’s good to get patents, but how will Google treat those patents? Is it going to indemnify HTC and Samsung against lawsuits? Why help those companies? They’re rivals now.”
My belief is yes, Google is going to do exactly that. If you want to know why I believe that, you’ll need to read my prior post…
Nicu 8:16 am on August 16, 2011 277 days ago Reply
I was probably too tired to go into all the details you provided in many lengthy answers. Sorry for the aggressiveness.
It’s not that details are not important, but here the big picture has strong traits that overshadow them. They can say all day long they love their competitors, but they just got into the Bing strategy: throw money at a losing business until it becomes profitable (or the money runs out, whichever comes first). PlayForSure your licensees and then Zune them is not going to work. They are the new Microsoft: stolen software, antitrust action dangers, throwing money at losing propositions and back-stabing their partners (while make them sign friendly declarations written by the same person in a chorus).
They have just added 60% to their head count. With no experience of integrating large companies, let alone a hardware company with totally different culture.
Those who do not know the history are bound to repeat it. Those boys who run Google are too young and too isolated in their wonderland campus / company to know any history.
rastard 8:35 am on August 16, 2011 277 days ago Reply
Here’s the difference in the way I see it:
1) “throw money at a losing business until it becomes profitable”
Google has alleged for more than a year now that Android already is profitable. Since they don’t break out numbers, we have no way of knowing whether they’re being truthful (or simply using creative accounting), but the chief complaint about Google hasn’t historically been that they “throw money at a losing business”, it’s been the opposite — that they abandon failed efforts too quickly for some who feel that they should have stuck in longer (seems like every couple of months there’s some Google product being shuttered).
2) “back-stabing their partners”
As I said earlier, I’m of the belief that Google did this acquisition primarily to use MMI”s patent portfolio to *protect* their partners. We’ll soon see which is actually the case. Aside from Apple though, what other partners has Google backstabbed to date?
3) “With no experience of integrating large companies, let alone a hardware company with totally different culture.”
They’ve said that MMI will be operated as a completely separate company. I actually believe them, and don’t think they have any intent of integrating MMI into Google. They haven’t even tried to do that with YouTube, one of their largest acquisitions to date.
Further, Google is notorious for it’s elitist (nee “arrogant”) hiring model. I simply don’t see them considering the 19000 MMI employees to be of the same caliber as existing Googlers, and therefore would want to keep them separate so as to not pollute their “legendary” Google culture.
We’ll see whether this is true soon enough too.
Nicu 9:37 am on August 16, 2011 277 days ago
Add a $12.5B loss to that Android profits and you get a huge loss.
As an independent company, Moto will continue to lose money, so Google will have to step in.
Youtube was much smaller, same type of business, with no intention of immediate profits. Moto has to show something to justify paying 19k people. Losses will add to Google’s bottom line so they will not be able to tolerate “independence” for long.
Independence is complete utopia, what are they going to do if they need money? Issue some MMI? Or Motorola bonds? Once you grow older than toddler stage, you understand that the real world has some hard limitations that you have to navigate from inside. Unlimited money from selling your users to your customers (advertisers) may prove to be actually limited when you play hardball with the big boys.
rastard 12:10 pm on August 16, 2011 277 days ago
Not to be pedantic, but i’s a $12.5B *acquisition* of a company running a *$50M los*s — not a $12.5B loss (Nicu – you really must be tired, because you of all people here surely know the difference). Subtract that $50M from whatever the Android Ad profits are (we have no idea since GOOG doesn’t break them out, but with the $2.75B I loosely calculated from Android Ads revenue, it’s fair to say that’s going to be a pretty big positive number — not a “huge loss”.
The Android-bashers on this board have asserting for at least a month now that all of the Android device manufacturers are going to abandon Android because of the lack of protection that Android provides against patent litigation. If Google owning MMI’s patent portfolio helps provide cover for Samsung, HTC, Sony, and all of the other OHA partners to keep trucking along with Android, that $2.7B in revenue will likely seem like a drop in the bucket (I seem to recall Schmidt going on record last fall about expecting Android to generate $10B in annual Ads revenue within the coming years).
As an aside, it’s been rather amusing watching the predictions and subsequent excuses here (or on Google Finance — I can’t remember when it was that people transitioned), several of which keep resurfacing:
2008: T-Mobile G1 released:
- Android sucks.
- This phone is technologically at least 2 years behind the iPhone.
- They blew it right out of the gate
- THIS IS THE END OF ANDROID
- NO ONE WILL BUY THEM WHEN THEY CAN BUY AN IPHONE INSTEAD.
2009: Motorola Droid:
- Android is still hanging on, but only because Motorola rescued them.
- The Droid may be a better phone than the other Androids, but it isn’t an iPhone and still sucks.
- NO ONE WILL BUY THEM ONCE THE NEXT IPHONE COME OUT.
- THEY’RE NEVER GOING TO CATCH UP.
1/2010: Nexus One direct sales:
- GOOGLE IS STABBING ALL OF ITS PARTNERS IN THE BACK, AND THEY’RE ALL GOING TO ABANDON ANDROID.
- THIS IS THE END OF ANDROID.
- THERE’S NO WAY THEY’RE EVER GOING TO CATCH UP with the number of iPhones being sold — iPhone’s head start is too strong.
Spring 2010: iPhone4 coming:
- NO ONE WILL BUY THEM ONCE THE IPHONE4 COMES OUT.
- THE IPHONE4 WILL BE THE END OF ANDROID.
Late 2010: Android smartphone sales catch iPhone sales:
- I don’t believe it — Google is lying. But who cares —
- more total iOS devices are still selling than Android devices, and THAT IS WHAT ACTUALLY COUNTS, NOT THE NUMBER OF PHONES BEING SOLD.
- @Caruso: ‘Google is going to abandon Android.’
2/2011:
- NO ONE WILL BUY ANDROIDS ANYMORE ONCE THE IPHONE4 COMES OUT ON VERIZON.
- THIS IS THE END OF ANDROID.
- @Caruso: ‘Google is going to abandon Android.’
6/2011: Because Google doesn’t have any patents, all of the OHA vendors ARE GOING TO ABANDON ANDROID.
- THIS IS THE END OF ANDROID.
- @Caruso: ‘Google is going to abandon Android.’
Today: MMI Acquisition:
- GOOGLE IS STABBING ALL OF ITS PARTNERS IN THE BACK, AND THEY’RE ALL GOING TO ABANDON ANDROID.
- THIS IS THE END OF ANDROID
- NO ONE WILL BUY THEM ONCE THE IPHONE5 COMES OUT.
- @Caruso: ‘well, Google isn’t going to abandon Android, but it’s only because they’re idiots.’
[Meanwhile, Android's growth has blown completely past iPhone, with each month's figures continuing to exceed the prior.]
[PREDICTIONS] Late 2011?: Total Android device sales catch total iOS device sales:
- I don’t believe it — Google is lying. But who cares —
- more iPads are selling than Android tablets, and THAT IS WHAT ACTUALLY COUNTS, NOT THE TOTAL NUMBER OF DEVICES BEING SOLD.
- @Caruso: ‘Google is going to abandon Android.’
Nicu 5:30 pm on August 16, 2011 277 days ago
when you buy something at any price that will bring losses, just to preserve very thin gains from another business, that is a loss, not an investment; when you invest, that is for growth and profits
JPWatkins 5:54 pm on August 16, 2011 277 days ago Reply
“when you buy something at any price that will bring losses”
My uncle, who was a very successful investor, used to ask me “When you buy a house, is that an expense or an investment?”
He always contented that is was a an expense (even though his condo in Aspen was probably one of his better investments.) This is much like that. Google will probably strip MDn’s patents and eventually toss it away—anything else is a big expense, not an investment for google.
Nicu 6:05 pm on August 16, 2011 277 days ago
even the patents are an expense to defend Android; they will not bring new tech that will make Android sell better
rastard 6:24 pm on August 16, 2011 277 days ago
@nicu: Nice philosophy, but it doesn’t map to the technical definition of a loss as per GAAP practices.
@jp: while I actually agree with your uncle (more specifically — houses one lives in are expenses; houses one rents out are investments), I’m not clear how his parable applies here, as MMI isn’t real estate.
MMI’s patent portfolio is an asset, that has value, and can either be used (offensively or defensively) or sold. Owning this asset allows Android to continue to grow, bringing in additional advertising revenue and profits.
Even though MMI currently produces a loss, as a company it does have value still, so I’d be surprised if Google just “tossed” it. Either selling it or letting it run separately (if they think it can generate a profit) seem like more likely outcomes.
On the off chance that Google does indeed toss the rest of MMI away (by toss I mean toss, not sell it), then that would indeed be a loss they would write down. Until then, it’s an investment still…
Nicu 8:52 pm on August 16, 2011 277 days ago
http://blogs.hbr.org/cs/2011/08/googles_strategic_mistakes_dro.html
@rastard the way bean counters call it (and when / if they write it down) doesn’t matter; what matters is that almost all of Google’s profits during the last two years went down the tube trying to sustain Android – how many years of Android profits are needed to plug this hole?
as you never hear / learn anything from others and just try to prove / impose your opinions, I cannot do anything for you (and wonder why you come here); so I can only wish you the best of luck with your GOOG investment; downgrades from BUY to SELL already started to come on the wire … you have been warned
Nicu 8:54 pm on August 16, 2011 277 days ago
it’s like an investment in a house for which you have to pay people to live in (you cannot live there and if you try to sell it, you’re lucky to get half the price back) – that means buying a losing business, take time to calm down and breathe deeply, and think slowly about it !
JPWatkins 9:07 pm on August 16, 2011 277 days ago
“I’m not clear how his parable applies here, as MMI isn’t real estate.”
As you tend to do, your response purposely misses and misstates the point.
The point, as you well know, is that sometimes when an expenditure is made, what seems like an investment often turns out in fact, to be an expense.
And previously, I was pointing out that taking $12.5 B and dividing by 17k patents is not a smart way to evaluate an acquisition.
BTW, I think YouTube was a profligate investment for Google. I also think the offer for GroupOn (another Chicago company) was ridiculous as well. It is however impossible parse exactly how Google’s “investments” have turned out. But it’s not hard to see that they have paid far too much for most of them. Apple has Apple TV as “a hobby” but for Google pretty much everything other than their ad services are hobbies.
Nicu 9:47 am on August 17, 2011 276 days ago
http://www.slate.com/id/2301771/
rastard 5:59 am on August 19, 2011 274 days ago
@jp: “BTW, I think YouTube was a profligate investment for Google. I also think the offer for GroupOn (another Chicago company) was ridiculous as well.”
I needed to go look up what “profligate” meant before writing.
Here’s a different point of view, which asserts that Google’s $1.6B investment in YouTube is now worth between $10-20B: http://www.businessinsider.com/youtube-valuation-2011-8
I rarely use YouTube and don’t know enough about that aspect of Google’s business, so neither agree nor disagree with either your or Gobry’s assessments. I just found the posting interesting in the context of this thread on investments vs. expenses…
Re: Groupon, I recall seeing articles somewhere asserting that a) Google didn’t actually offer what the media said Google offered, and even some saying that Google never actually made an offer at all. Too lazy to look for them, but I agree — Groupon’s business model doesn’t seem like it has any chance of ever becoming profitable, and I expect them to go the way of Pets.com or MySpace within a couple of years.
rastard 2:45 am on August 20, 2011 274 days ago
http://www.businessweek.com/technology/is-groupon-a-financial-train-wreck-waiting-to-happen-08182011.html
Hadn’t seen this article before, but just thought it was funny to see Pets.com used as the comparison here…
caruso2323 10:26 pm on August 15, 2011 278 days ago Reply
MMI with 17,000 patents sold for 12.5B to GOOG … How valuable can these patents be …
If one looks closely at Motorola’s past, it is really hard to pin anything that could be significant :
http://www.reuters.com/article/2011/08/15/motorola-idUSN1E77E1Q120110815?feedType=RSS&feedName=marketsNews&rpc=43
I have copy-pasted herein below the main highlights of the article:
———————————————————-
It would be most interesting to find a time line break down of these patents …
I will not attempt to find that info, but let us take a group of Motorola’s “innovations” :
1) MicroTAC, its first first flip-phone, which has a plastic cover that flips open to reveal its keypad. * 1994: Motorola dominates global cell market with a 32.5 pct share, versus Nokia’s 21 pct, according to Gartner…. Hmmmm That was ANALOG TECHNOLOGY …
2) Mid-1990s: The first digital wireless networks are built in Europe, but Motorola is slow to discard analog for digital. * 1996: Launches StarTAC, the first of its signature clamshell phone range with a lid that hinges open. * 2000: Motorola’s market share is 13 percent vs Nokia’s 31 percent,
Hmmmm… If Motorola’s market share shrunk from 32.5% to 13% they could not have patented anything exciting and it hovers in the mid-teen range for years … LOL
3) 2004: Late in the year Motorola launches Razr, an ultra-thin phone that becomes a design icon. * 2006: In July, Motorola says 50 million Razr phones already sold. CEO Ed Zander promises 500 million. But market gets saturated with Razrs and by year-end it is being given away for free. Motorola market share peaks around 23 percent.
The only innovation that I could see in the era off the Razr, is the integration of iTunes to its phone … People liked having a music player as part of a DumbPhone… But it was THIN, so they may have some patents on making thin DumbPhones … But if they had a defendable patent, would you not think that Motorola would not have sued AAPL as it made thinner and thinner SmartPhones and not just DumbPhones. Heck , the Razr does not even match the capabilities of an iPod Touch E/W with that Chinese Gizmo to make calls…
4) 2007: Activist investor Carl Icahn starts pushing Motorola to split up, buy back shares and fire its CEO. Apple Inc (AAPL.O) sells first iPhone. Motorola ends year with 9 percent share. * January 2008: Greg Brown replaces Zander as CEO. Motorola posts a loss for three out of four quarters of that year. * October 2008: New Co-CEO Sanjay Jha reveals plan to bet future entirely on Google’s Android platform. Cuts thousands of jobs. Motorola ends year with less than 7 percent share.
Hmmmm … How on earth could this internal collapse might have been conductive to create innovation ?
5) November 2009: Motorola unveils first Android phone with Verizon Wireless kick-starting the successful Droid brand. * January 2011: Motorola Inc is split into Motorola Solutions and Motorola Mobility. Announces plan to launch first tablet based on Android to compete with Apple’s iPad…
The only potential pertinent patents they may have applied for might be about 4G, and LTE… But given the routing of Motorola, I have some serious doubts that they may have matched Nortel’s treasure of patents…
caruso2323 1:25 am on August 16, 2011 278 days ago Reply
Google Set to Pay Dot-Com Bubble Price in Motorola Mobility Deal: Real M&A
http://www.bloomberg.com/news/2011-08-16/google-set-to-pay-dot-com-bubble-price-in-motorola-mobility-deal-real-m-a.html?cmpid=yhoo
rastard 12:25 pm on August 16, 2011 277 days ago Reply
Interesting article — thanks for posting it.
“Motorola Mobility also has $3 billion in cash and no debt.”
I’m too lazy to look up the specifics of the deal. Does this mean that Google actually only paid $9.5B net?
“The deal values Motorola’s more than 17,000 patents, as well as 7,500 more that are pending, at about $6 billion, or almost two-thirds of the total equity price, Stuart Jeffrey, a New York-based analyst at Nomura, wrote in a research note yesterday.”
If yes to the prior question, that means:
$3B cash
$6B for portfolio of 17000 patents plus an additional 7500 patents pending (vs. the $4.5B paid for 6000 Nortel patents).
leaving:
$3.5B for the rest of MMI, which is losing $50M.
caruso2323 11:18 am on August 17, 2011 276 days ago Reply
That Says all !
——————————————
MARKET PULSE Archives
Aug. 16, 2011, 3:42 p.m. EDT
S&P cuts Google rating to sell
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GOOG MMI
SAN FRANCISCO (MarketWatch) – Shares of Google Inc. GOOG -3.27% on Tueday fell more than 3% to $538.70. Standard & Poor’s Equity Research downgraded the stock’s rating to sell from buy, saying the company’s planned merger with Motorola Mobility MMI -0.26% will likely “negatively impact” the tech giant’s growth. S&P also said it’s “not sure” the acquisition will help Google protect its Android operating system from intellectual property issues. S&P cut its price target to $500 from $700.
Nicu 8:28 am on August 16, 2011 277 days ago Reply
http://daringfireball.net/2011/08/balls
rastard 12:16 pm on August 16, 2011 277 days ago Reply
Well, Gruber has at least made a better argument than the lameness you posted from Yarow earlier…