I'm surprised by the author using Motorola as a historical example of acquiring that went wrong. I thought the goal of acquiring them was for the patents and the sell off was the bits Google didn't want or need.
It's amazing that neither the article nor any of the comments so far mention that Google bought part of Motorola, for its 10,000 patents. Then sold it a few years later.
I was in Google Patents and I interviewed people for the position of "acquirer of patents." This was a period when they actually thought the "throw weight" of your patent portfolio really mattered in cross-licensing deals. Most of those patents were utterly worthless in any sort of deal.
the Motorola acquisition wasn't a disaster. It's just that many didn't understand Google' intent with Motorola. Google tried to take a stake in Nortel's patent bid, as the wireless patent war started heating up in 2011, but it eventually bailed out. Google instead went after Moto's patent portfolio. It bought the entire company, which came with $3B free cash and tax credit, and stripped off unnecessary assets it didn't need to Arris and Lenovo. All in all, Google ended up paying less than $4B for what they had previously valued at $5B.
I think the subtext is that. before, the Google line on the acquisition is that it was solely for the patents. Possibly to not piss off their other partners who are making the hardware that competes with Motorola. To my knowledge this is the first Google exec to admit publicly that having control over both the hardware and software platforms could make better products.
When Google bought Motorola, the reasoning I read was all about patents. They still have those patents, and it might have been a good acquisition no matter the state of Motorola the company...
I don't think the acquisition of Motorola was for anything other than the patent portfolio.
In https://www.google.com/press/motorola/ , Google mentions Motorola Mobility (the mobile phone arm of Motorola), but I believe this is overshadowed by the overt statement about patents immediately afterward.
Google acquired Motorola for its patents as ammunition in a larger war. I agree it supports your main point about acquisitions in general, but I'm not sure it's indicative of what being bought by Google is like in the general case.
I'm sorry but this is bullshit.. the obvious interpretation is that Google wanted the patents and ended up with a business line they weren't interested in. Leveraging it for PR the way they did was insincere at best, especially on such a short timeframe.
Also it's entirely unclear to me what the outcome might have been for Motorola as a whole, had Google not been having wet dreams about its patent portfolio. Perhaps you have some insight here that you're not sharing?
You’re gonna love this — Motorola was bought by Google in an attempt to jumpstart their hardware business but it turned out to be a failed acquisition. They ended up grabbing the patent portfolio and selling off the rest of the biz fairly quickly.
> You’re gonna love this — Motorola was bought by Google in an attempt to jumpstart their hardware business but it turned out to be a failed acquisition.
I wouldn't call Motorola a failed acquisition - Google bought Motorola as a shield in an increasingly litigious environment: this was the age of Apple going "thermonuclear", Microsoft and patent trolls were wantonly shaking down Android vendors, and beginning to circle Google itself.
Motorola (under Google) had the best value-for-money smartphones - their midrange was solid, and reasonably priced while everyone else was continuously shifting to flagships, with each release priced higher than the last.
From the outside looking in, Google appeared to dispose Motorola to make Samsung happy - Samsung had been complaining loudly and widely about the Motorola acquisition, and openly flirted with other mobile platforms as a hedge.
Motorola shareholders got paid, Google got the patents it wanted, Samsung remained the 600 lb gorilla in Androidland, Lenovo got a good brand and keeps making ok phones to this day. So, not a failed acquisition by any reasonable measure
Google bought Motorola patents that came with hardware businesses attached for defense purposes, not because they wanted in on the hardware business. This was after they found themselves unarmed during a thermonuclear patent war.
Google dropped the hardware businesses and kept the patents. The patent market was notably frothy at the time, and conventional wisdom then valued Motorola's patent chest at $4.0-4.5 billion (Apple + MS consortium bought the comparable Nortel trove for a price in that ballpark). If that value is correct, then Google made a profit on buying and selling Motorola (patents + Moto Home + Moto Mobile).
Perhaps, but it's not like Google lost much by buying Motorola.
"I think the Motorola transaction has been a success for us. Financially, we bought the asset for $12.5 billion. It had $3 billion in cash; we were able to sell the Home division for $2.5 billion; we ended selling the handset division for $3 billion. There were some other tax assets as well. When you work through the math, you realize we spent between $2.5 billion and $3.5 billion for the patent assets. At the time, the nearest comparable transaction was the Nortel patent auction where Microsoft and Apple teamed up to buy that asset for $4.5 billion. And there’s a good argument that the Motorola patent portfolio is a better portfolio."
Some speculate that the Motorola acquisition was for their patent portfolio rather than their product line. I don't know how much credence to give that theory. An argument in favor of it is how quickly the Motorola phone business (minus the patents) was sold off to Motorola and an argument against it is that Motorola's former patents don't seem to be especially valuable to Google.
motorola was patents ($8B in protection IIRC) + key talent acquisition (called ATG at the time). I don't think Google ever wanted the bulk of motorola's operations or rf engineering.
They bought it, stripped out the things they wanted to keep, then spun it back out.
This article shed credibility in the 1st paragraph, calling the Motorola purchase a patent and panic-driven deal. Au contraire, it was a heck of good deal for Google. It's not clear that Google panics about anything.
Google sold off different parts of Motorola. And i believe in the end they still kept some patents. Google didn’t end up losing much money over Motorola.
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