Huge announcement if true, and if this accounts for the entirety of the Motorola purchase that Google made.<p>That means that in less than two years, Google shredded 85% of the $13bn paid for Motorola. At the time, the high price paid was excused for the patents, because the business itself did not generate nearly enough earnings to justify the price. Now, if it is true that the patents are part of the deal (the article states they are), it's proof that these did not have nearly the value anticipated.<p>It's also a big statement on Google's ability to succeed in the hardware market, where they've never seemed to be able to gain real success despite their attempts with notebooks and phones.<p>Edit: the article states the deal would include more than 10,000 patents. Originally Motorola was estimated to have 17,000 patents at the time of its purchase by Google. So while this is still speculation, and we do not know full details, there's a good chance Google may have cherry-picked the patents they felt were important to retain.<p>Follow-up edit: the 10,000 patent number comes from this article:
<a href="http://usa.chinadaily.com.cn/2014-01/30/content_17265533.htm" rel="nofollow">http://usa.chinadaily.com.cn/2014-01/30/content_17265533.htm</a><p>Edit 3: The value destruction here isn't so bad as 85%. See Magicalist's comment below for a good summary - Google picked up a lot of cash, tax loss assets, and $2.2bn from the sale of one of Motorola's subsidiary businesses as part of that $13bn original purchase price. Still a loss but not as dramatic as the headline number.
Google just confirmed it, and explained some of their reasoning: <a href="http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-motorola-mobility.html" rel="nofollow">http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...</a><p>I'm inexplicably bummed about this. I was excited to see what Google would do long term with Motorola, and I thought the Moto X and Moto G was a great start. I thought eventually, a Google+Motorola powerhouse could provide a nice yin to Apple's yang.
It seems to me that this must have been the intention all along. When Google purchased them, Motorola was about to start suing other members of the Android ecosystem because they were that desperate. So the deal was always defensive. I think the value of Motorola's IP was always overstated and Google knew that but it made for a good story for shareholders along with Google signalling they were serious about hardware. And maybe they are, but the whole "American made" angle they took and all the tax incentives they got, and for what...to sell the company 7 months after launching a flagship phone??? It's a great phone, but it looks to me like this whole thing was set-up to sell out from the start. If so, it was a brilliant unwinding of something that could have been very bad for Android at a critical time. As others have pointed out, they didn't take as bad a bath financially as it seems either.<p>The alternative narrative is that they suddenly had a change of heart because of Nest, but why not just integrate or put that team in charge of Motorola if it's about talent?<p>In any case, the Moto X is a really nice phone. I feel bad for the employees of Motorola and find this maneuvering very "corporate" and un-Googley.
It's hard not to draw connections between the various events of the last week or so: 1) Google/Samsung patent deal, 2) Google purchases Nest, 3) Google sells Motorola, 4) Samsung suddenly cools on Tizen.<p>Theory: Google gets offered the opportunity to buy Nest. Either Larry or Sergey gets serious interested. They bought Motorola because they wanted a serious stake in the hardware market. They toss up which is better - Motorola or Nest? They decide Nest is the winner. They realize the valuations are such that they could pretty much just swap Motorola for Nest. But there's a problem: Motorola was also their insurance for making sure they would always have an OEM to make Android handsets. If Samsung ever turned - they would never find themselves unable to secure a Nexus partner. So they go to Samsung, and offer a deal: patents, guarantees of support, probably other stuff: as long as you agree to make Android your flagship each year AND GPE phone version of it. This seems good enough. Motorola not needed any more and they can get a new toy to play with - Nest is the winner.
This makes this tweet[1] from Chris Dixon hilarious:<p>"Which strategy wins the future: stock buybacks or investing in AI + robots + smart devices?"<p>I mean it really shouldn't surprise anyone that a VC would be cheerleading expensive acquisitions with no regard for shareholder value or whether it has any hope of making a significant return.<p>But the real answer to his question is: organic growth. And if you are confident in your ability to create organic growth, then the best way to use large amounts of cash to create shareholder value over the long-term is stock buybacks (assuming you have the cash to fund that organic growth and your shares are undervalued, which in Apple's case, both are true).<p>[1]<a href="https://twitter.com/cdixon/status/427602474086584320" rel="nofollow">https://twitter.com/cdixon/status/427602474086584320</a>
Better article: <a href="http://investor.google.com/releases/2014/0129.html" rel="nofollow">http://investor.google.com/releases/2014/0129.html</a><p>Assuming that google keeps the majority of/important patents then they basically bought the patents for $4.74 billion. They sold the "set top" division for $2.35 billion and now they're selling the mobility division for $2.91 billion. They also kept about $3 billion in cash that Motorolla was holding when they bought them for $13 billion.<p>That's not even counting whatever tax incentives they get from these deals. So all in all, it isn't as bad of a deal as it looks like on the surface (in fact I assume it is what Google was planning from the beginning).
<a href="http://investor.google.com/releases/2014/0129.html" rel="nofollow">http://investor.google.com/releases/2014/0129.html</a><p>"Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures. As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio."
Regardless of the Google specifics, we should really have some sympathy for the Motorola employees. I doubt Lenovo will stomach quarterly losses the way Google did while they restructured. My guess is, we're going to see big layoffs.
I wonder if this has anything to do with Apple's focus on the Chinese market. Google could effectively hand off a tightly wound partnership to an established Chinese company in Lenovo that can then leverage Android more effectively in a head to head battle with Apple.<p>In the interim, Google keeps its hands clean and doesn't enter into the discussions that plague any sort of success in the Chinese marketplace.
Despite the huge delta in what they paid for Motorola, vs what they're reported to be selling it for, other people have pointed out that the way the deal was structured may not actually wind up making it a huge financial loss for Google.<p>I certainly can't think of any way to spin the way this turned out to be positive for Google, but I don't think the absolute numbers will worry them all that much.<p>I haven't seen anyone here mention that at the time of the acquisition, Motorola was attempting to sue all the other Android manufacturers over its patents; and it was posited that Google was basically forced to buy Motorola to keep them from poisoning the ecosystem.<p>I assume that not happening was probably worth more to Google than what they would up having to pay for Motorola.<p>Psychologically, it does help reinforce the idea that Google really doesn't know what it's doing with regards to hardware (although hey, they just paid more for Nest than potentially what they're selling Motorola for).
I am sure I am part of the minority on HN involved in the enterprise market, but I am intrigued by what Lenovo's plans might be for Motorola. With their already established relationships and customer base, Lenovo should have a much easier time selling their hardware than Google did. At the very least, this move might be the final death knell for Blackberry.
The timing of this (vs. the Google/Samsung arrangement) really makes it look like Google's involvement with Motorola was simply to intimidate Samsung. The message was we'll piss away our advertising revenue to destroy you if you don't do what we want. Short term success maybe but in the long term it puts Google firmly on the Microsoft track. You can only gain so much via intimidation.
While many seem to predict doom and gloom here, perhaps Google decided it rather gets an extra ally (Lenovo) that could produce Android phones and recoup some money they spent on the acquisition in the process? It also clears Google of any hints of favouritism towards Moto and frees up a lot of resources. I don't think Google knew what to do with a mass-producing phone manufacturer (plus its IP) under its direct control, just like a cat staring at a ball of yarn, swatting at it for some time, before running off to do something else. Verticalisation used to be the bees-knees and has a lot of lock-in potential, but I don't think that's where Google's ambition lies, I feel like it was weighing them down.<p>Google seems to have found a new niche to explore, though. It seems to have circled the 'Internet Of Things' on their todo list quite clearly and seem to be taking no risk of arriving late to the party. In a sense, what Apple did earlier to secure its iPhone launch, is what Google is doing now wrt the IOT. That and the smartphone market seems to be slowing down to a point of maximum saturation. Then there's not much to do for Google with a mid-tier phone manufacturer under its belt with ever decreasing margins. On the other hand, who would be a good ally to have when you were interested in the Internet Of Things? Maybe some manufacturer which produces everything from smartphones, washing machines, TVs to tanks and ships, and which coincidentally also happens to be the biggest Android manufacturer? A slightly cynical me perhaps even sees the Motorola sell-off as some sort of token sacrifice to ease all worries on both sides of the 10 year patent deal (I could imagine Samsung not releasing Tizen as a smartphone OS to compete with Android, but perhaps use it as a basis for IOT-related appliances, whatever those might be, and complement Android rather than fight it).<p>But that's all speculation from my side, but to be honest, I was yearning for some new technology developments, most of the land has been claimed in the space of smartphone technology and most of the battles taking place nowadays seem to be patent trolls and patent bullies doing what they do best: stink it up for everyone involved.
It's a tangent but I'm a little disappointed by this latest executive-level assault on the language, from Larry Page:<p>> So until then, it’s business as usual. I’m phenomenally impressed with everything the Motorola team has achieved and confident that with Lenovo as a partner, Motorola will build more and more great products for people everywhere.<p><a href="http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-motorola-mobility.html" rel="nofollow">http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...</a><p>"Partner." Yeah...
Wow, that seems... sudden. If the Motorola Mobility purchase was meant to be strategic (and surely a purchase that big was), how could they have possibly had time to implement that strategy and truly gauge its effectiveness?<p>I'd say this announcement, if true, is downright shocking. Not saying it's <i>wrong</i>, mind you, just that it's very, very surprising. At least from the Google perspective.<p>Now, Lenovo, OTOH, this seems to fit the "PC Plus" view very well. If this is true, it could be a huge win for Lenovo.
There are a lot of Chicago real-estate agents that won't sleep well tonight.<p>The Mobility move to downtown was supposed to happen in a few months. Google signed a 15-year deal on 750,000 square feet (<i>17+ acres</i>) of office space at the Merchandise Mart. Will Leonovo assume that lease?
I'm not a huge fan of Android, but I had hoped that Google would use Motorola to take a holistic approach to security similar to what Apple can do. This would have been a serious pain for both the NSA and the PLA, but instead they are selling the whole business to the PLA.
I wonder if it's true that G did buy it in somewhat of a panic due to what was happening with patents at the time, as some have speculated. I dunno how something as protracted as an acquisition can happen as a result of panicking, though.
I know this is a fantasy at best, but I keep fantasizing they're doing this so they can have the cash liquid... to buy Nintendo. Or Sony.<p>I like Google's attitude towards hardware and I want them in the gaming industry.
What!? But... I loved the Moto G. And honestly, I don't get the love people have for Lenovo. Thinkpads are... okay. Lenovo's ownership of the brand could be described as stewardship at best. But they took the leading brand in PC laptops and kept it the leading brand in PC laptops while tablets and Apple destroyed the entire market for PC laptops.<p>Lenovo will never do anything <i>great</i> with the brand. Google had promise.
Slightly disappointed this is happening, Google having its own place to start really getting invested in consumer hardware seemed like a good thing (getting "pure" experiences without having to pay top dollar). I got the Moto G and it's probably one of the better value propositions out there.<p>I wonder how things will go with Lenovo in charge.
"Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem."<p><a href="http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-motorola-mobility.html" rel="nofollow">http://googleblog.blogspot.com/2014/01/lenovo-to-acquire-mot...</a>
I suspect the patents were proving to be of less value than Google thought. Combine that with Samsung and other big players investigating other OS's for fear of Google pulling a Microsoft with the Surface. Any way I slice it though, it still sounds like a 10+ billion dollar mistake.
Google looks a lot smarter to me now. They paid <i>way</i> too much for Motorola Mobility just to get the patents. Maybe they were forced to buy a bunch of stuff they didn't want? It makes sense to recoup as much of the money as they can by selling off what they didn't even want.
Best move all year for Google.<p>Owning Moto's handset business was a goiter on Google, and the lack of clarity on Google's intentions might have been necessary to extract maximum value from this sale, but it was very bad in every other way.
Smart move from Google, they remove the possibility of being suspected of favoritism. And I suppose they keep the patents, which is what they were really interested in all along.
The thing that always surprised me was how quick Google was to get out of the set-top business. That seemed like a pretty incredible opportunity to me.
Lenovo has been looking to enter the U.S. Smartphone for some time[0]. Acquiring a newly revitalized brand seems like a fairly good plan to do so.<p>0: <a href="http://online.wsj.com/news/articles/SB10001424127887323336104578502843289017624" rel="nofollow">http://online.wsj.com/news/articles/SB1000142412788732333610...</a>
Makes me wonder how this affects their recent patent pact with Samsung -- now that they have Samsung as a form of support, they no longer need Motorola Mobility?<p>Perhaps a patent pact with Motorola Mobility would've been better than buying them outright?
My guess is that Google and Samsung have come to some arrangement that will bring them closer. Perhaps Samsung gets more engineers working on Android directly, perhaps Samsung drops S-Voice and some of its proprietary stuff.
we are forgetting something here at least the TC post did<p>Moto still has Fed/Military contracts as this is why foreign buyers were nto considered the first time around.<p>This might not go through to completion
With the sale of Motorola, the intro of Chrome Apps for Mobile, the stepping down of Andy Rubin - is Google losing interest in Android?
When will we see ChromeOS for Mobile?
Very interesting! Lenovo's laptops seem good quality to me.<p>Hopefully this will make my Atrix and Lapdock more sought after.... and my Xoom..... (perhaps too much Motorola hardware???)
super-terrific, (non_)mathematical-ish analysis of their original purchase of Motorola (from 2012).<p><a href="http://brandnewgames.tumblr.com/post/26984798194/commuter-train-analysis-of-android-windows-phone" rel="nofollow">http://brandnewgames.tumblr.com/post/26984798194/commuter-tr...</a>
That is still too much for Motorola handset division. Google must estatic at he chance to recoup that much from one of the worst deals they've ever done.
It's over, Android is finished. With Google parting hands with Motorola and abandoning Nexus all together (Google Play Edition phones will take over), the consumer is entirely dependent of consumer-oriented manufactures like Samsung. A black day for Android, a good day for Samsung its monopoly.