Print 26 comment(s) - last by Tylerist.. on Jul 30 at 9:45 AM

Google is promoting synergy (like a boss).  (Source: NBC)
Surprisingly, Google says that cash and "goodwill" were also big drivers

Google Inc. (GOOGsurprised the tech world last year with its decision to scoop up struggling veteran devicemaker Motorola Mobility, Inc. -- one of the "big three" of the Android world.  Some figured that Motorola's "war chest" of over 17,000 patents amounted to nearly the entire $12.5B USD valuation Google made in its successful purchase bid.

Traditionally, Google did not look to patent its software innovation at the same pace as rivals Apple, Inc. (AAPL).  With a lawsuit from Oracle Corp. (ORCL) directly targeting Google and with Apple turning up the lawsuit pressure on OEMs, many felt Google needed to buy the patents to defend itself and its partners.

But in newly released regulatory filings Google says the patents represented less than half the valuation.

Google's breakdown of Motorola's worth is as follows:
  • Patents:     $5.5B USD 
  • Cash:         $2.9B USD
  • Goodwill:   $2.6B USD
  • Customers:   $730M USD
  • Other:           $670M USD
For those curious what exactly Google means by "goodwill", the company elaborates slightly that it is "primarily attributed to the synergies expected to arise after the acquisition."

However, Google has left just about everyone in the dark as to exactly what those "synergies" might be.  During its earnings call, it did not discuss its long-term strategy or plan for Motorola.

Google completed the acquisition in May, after Chinese regulators finally stopped dragging their heels on approval.   U.S. and European antitrust regulators approved the acquisition months before.

One thing is for sure; whatever Google's secret "synergies" may be, they have yet to take hold.  Motorola Mobility made $1.25B USD in revenue in the second calendar quarter, but lost $233M USD, once operating expenses were taken into account.  Google still managed to earn $2.79B USD, though, despite that hardship.

Source: WSJ

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isn't it straight forward?
By zephyrprime on 7/25/2012 5:13:51 PM , Rating: 2
Motorola mobility only does two thing: make handsets and tablets. So isn't the obvious answer that Goog is going to make their own Handsets and tablets? They were already going in this direction with the Nexus devices. I think that google, and now even microsoft, agree with Apple that tight integration of software and hardware is the only way to make really refined products.

RE: isn't it straight forward?
By cditty on 7/25/2012 5:19:43 PM , Rating: 2
I agree. They are all going to be making their own devices. Control the quality, control the updates.

Apple got that part right (actually, they got more than that right). I would LOVE to get a Nexus from Motorola. I hope I get to see some synergy soon.

It is an exciting tech time, with Microsoft deploying Win 8 and making devices, to Google/Motorola, and Apple trying to stay at the top.

RE: isn't it straight forward?
By Paj on 7/26/2012 7:33:47 AM , Rating: 2
I'd say so. It's a good move - am getting sick of manufacturer skins on Android, and the Nexus 7 (even though its made by Asus) has rock solid user experience from what I've read.

RE: isn't it straight forward?
By Tylerist on 7/30/2012 9:45:42 AM , Rating: 2
You should do your homework, they don't just make phones and tablets. Motorola Mobility includes the cable television business, formerly General Instrument Corp. which invented digital cable telvision and still dominates that market. The cell phone business dragged down their earnings, but there's a Motorola settop box in 10s of millions of American homes (and internationally too). Google is too smart to ignore that especially when they're rolling out GoogleTV (2nd try) and this time they have the engineering team who rolled out digital cable to most of America the first time. Granted, they might still sell that business off to someone else, but it remains a moneymaker even if it reverts back to General Instrument.. owned by no one.

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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