Google Breaks Down Why it Bought Motorola -- And Downplays Patents
July 25, 2012 2:39 PM
comment(s) - last by
Google is promoting synergy (like a boss).
Surprisingly, Google says that cash and "goodwill" were also big drivers
Google Inc. (
surprised 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. (
from Oracle Corp. (
) 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.
regulatory filings Google says the patents represented less than half the valuation.
Google's breakdown of Motorola's worth is as follows:
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.
completed the acquisition
in May, after Chinese regulators finally stopped dragging their heels on approval. U.S. and European antitrust regulators approved the acquisition
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.
This article is over a month old, voting and posting comments is disabled
7/26/2012 12:05:17 PM
Which of course would only be a "big driver" to acquire the company if it was actually negative, that is if Google paid less than fair net book value for Motorola. Why would paying more than the company is worth be ever considered an incentive?
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