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Motorola patents are apparently worth $5.5 billion

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Motorola patents are worth $5.5 billion to Google
For everyone who wasn’t living under a rock last year, one of the biggest stories of the summer was Google’s surprise acquisition of Motorola Mobility, the mobile phone and set-top box company that had been spun off from Motorola proper. There was lots of speculation about the role that patents played in the purchase (hint: a lot), but it wasn’t clear exactly how valuable Google thought those patents were. Now thanks to an SEC form released this week, we have a much clearer picture of how Google views the purchase.

Not surprisingly, patents are the biggest slice of the pie – Google valued “patents and developed technology” as commanding $5.5 billion of the $12.4 billion price tag. Still, that leaves more than half of the purchase price remaining, and it’s interesting to see how Google values those parts, some of which are intangibles. Google attributed $2.9 billion to Motorola’s cash on hand, but almost as much ($2.6 billion) to “goodwill”.

What goodwill would that be? According to the filing, this goodwill is “primarily attributed to the synergies expected to arise after the acquisition.” So apparently Larry Page wasn’t just blowing a smokescreen when he said they want to supercharge Android with Motorola’s hardware – they really are expecting to generate enormous revenue increases from teaming up with the U.S. hardware manufacturer.

To round out the rest of the purchase, the Form 10-Q cited acquired value of $730 million for customer relationships, and an additional $670 million for “other net assets acquired”. Most of this seems fairly standard, but that’s quite a lot of goodwill that Google believes they will reap from the purchase down the road. If that’s the case, we can expect to see some bold moves with Motorola in the coming years.

What would you like to see Googerola do?

source: Google's Form 10-Q via 9to5Google

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