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Analyst says after failing to help with patent cases, Google overpaid for Motorola

Posted: , by Alan F.

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Analyst says after failing to help with patent cases, Google overpaid for Motorola
When Google offered to buy Motorola for $12.4 billion in August 2011, the idea was to use the company's massive IP portfolio to protect Google from the number of patent cases that were beginning to spring up. The deal closed last May and as we've seen, has really not helped Google all that much. Just the other day, a judge in Washington state told Motorola that it will not get the $4 billion a year from Microsoft that it had been seeking for licensing standards-essential patents related to the H.264 wireless standard and the 802.11 wireless standard. Instead, the judge ruled that Motorola is entitled to $1.8 million a year for the licensing.

Last week, the ITC ruled that Apple's patent for a proximity sensor was not infringed on by Apple. Motorola claimed that Apple's defense of prior art was invalid since that was for a device using buttons and Motorola's patent covered a touchscreen device. Motorola will probably appeal the ruling.

"We acquired Motorola to level the playing field in patent attacks against Android and draw on Motorola’s long history of innovation. In just under a year they’ve accomplished a lot, with impressive velocity and execution. We’re excited about Motorola’s future."-Matt Kallman, Google spokesman

The number of cases where Google could not use Motorola's patents to its advantage have clearly made it seem that Google had overpaid for Motorola. According to Erin-Michael Gill, managing director of MDB Capital Group LLC, an investment bank that specializes in patent issues, "the perceived value of the portfolio is clearly less" than what Google paid, said. As a business, the deal has not been a winner either. Motorola Mobility's 2012 revenue of $4.14 billion, was about 8 percent of Google’s total sales. Motorola posted $1.1 billion in losses last year. 

Google remains positive about Motorola's future.The company has become known for its Motorola DROID RAZR MAXX and Motorola DROID RAZR MAXX HD models, both with a 3300mAh battery that allows power users to run their phone more than one day on a single charge. Then there is the rumor involving the Motorola X which remains a mystery. The latest we've heard is that the device will have 20 colors that buyers can select from.

"Motorola has a great set of assets,” Google Chief Financial Officer Patrick Pichette said at a conference in February. It had a pipeline of products that were fine, but not really to the standards that Google would say is wow, innovative, transformative. So you invest for the long term."-Patrick Pichette, Google Chief Financial Officer

source: Bloomberg

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posted on 30 Apr 2013, 01:42

1. UrbanPhantom (Posts: 949; Member since: 30 Oct 2012)

I think Google should have bought Nokia instead of Motorola Mobility, but it is possible that deal was never going to be on the table. In any event, Microsoft now has Nokia to champion Windows Phone, and is making full use of them even without having made a direct purchase...

posted on 30 Apr 2013, 01:59 3

3. lyndon420 (Posts: 5022; Member since: 11 Jul 2012)

A direct purchase no, but ms pumps millions into Nokia to keep them at ms's beck and call.

posted on 30 Apr 2013, 03:02 3

7. Fossi (Posts: 3; Member since: 23 Apr 2013)

Main thing stands Nokia isn´t for sale and hasn´t been for sale.. So stop with the trolling that Microsoft controls Nokia.. That last sentence goes to everyone

posted on 30 Apr 2013, 05:42 2

10. Hemlocke (unregistered)

Nokia is, and has been, for sale. Apple, Google, or anyone else, could just swoop in and buy them today. That is always a scenario when you are a publicly traded company.

posted on 30 Apr 2013, 12:20

15. InspectorGadget80 (unregistered)

too give u a history note it was MOTOROLA who invented the cell phone.

posted on 30 Apr 2013, 01:45

2. jinxed (Posts: 107; Member since: 10 Jan 2013)

wont the wireless standards some under Motorola Solutions? And did Google buy both Motorola Solutions and Mobility ?

posted on 30 Apr 2013, 02:14

4. FlushGordon (unregistered)

Jusr wondering why the heck Google is using SAMSUNG, ASUS and LG as their NEXUS flag bearer instead of MOTOROLLA? doesn't make sense

posted on 01 May 2013, 12:03

16. DFranch (Posts: 254; Member since: 20 Apr 2012)

because if they use Motorolla for the nexus, then it may look like Google is showing favortism to Motorolla. They don't want any of their partners to think they are getting sloppy seconds, they might re-think their investment in Android.

posted on 30 Apr 2013, 02:16

5. StreetNerd (Posts: 836; Member since: 08 Dec 2010)

The last 12 years they havent sold any moto phones here in the Netherlands :')

posted on 30 Apr 2013, 02:44

6. roscuthiii (Posts: 2247; Member since: 18 Jul 2010)

Moto was bought as a means of patent protection against suits, not really for going on the patent offense. Could be wrong but the listed suits were those already filed (and/or counter claims) my Moto before the purchase .
Analysts... half of what come out of their mouths is wrong, half is just BS.

Also, "the ITC ruled that Apple's patent for a proximity sensor was not infringed on by Apple."???
Maybe make one of those Apples a Moto instead. I'll even let you pick which one, I'm sure you can get it right.

posted on 30 Apr 2013, 04:15

8. JMartin22 (Posts: 2013; Member since: 30 Apr 2013)

Given how hostile their competitors were... err are; I can't blame Google for trying to take a procurement in investing their model in an increasingly litigious environment. A shame it seems to be taking an opposite effect.

posted on 30 Apr 2013, 05:33

9. joey_sfb (Posts: 6632; Member since: 29 Mar 2012)

I rather Google put in more effort in motorola r & d and manufacturing! Company always lead thru these means.

Have you ever seen a technological company lead thru persuasive legality?

posted on 30 Apr 2013, 10:39

13. Bilpocalypse (Posts: 301; Member since: 13 Oct 2012)

Apple maybe.

posted on 30 Apr 2013, 07:05 1

11. Aeires (unregistered)

Analysts, have any of them gotten anything right?

posted on 30 Apr 2013, 09:14

12. lubba (Posts: 1313; Member since: 17 Jan 2011)

@UrbanPhantom... For the last 3 year, I never heard any news anywhere that Nokia is for sale. I did though hear couple of weeks ago Nokia made the right choice in choosing WP. Isn't that great! MS and Nokia are business partners. There is no conspiracy theory. I do believe though that if Nokia chose Android, they would have sunk fast and would have been put up for sale. Who would buy them, who knows?

posted on 30 Apr 2013, 12:20

14. InspectorGadget80 (unregistered)

I think it was a wise choice. we don't want too see Motorola go bankrupt or loose too the competition. their still a good way Motorola can come back too the top like they did with their RAZR phones years ago. Sometimes I think analyst are a bunch of numbskulls. They think they know whats right cause they think they can predict in the future but their wrong

posted on 29 Dec 2013, 22:19

17. techloverNYC (Posts: 601; Member since: 20 Nov 2012)

MOTOROLA, Blackberry, and Nokia.....any1 besides me remember the glory day.........

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