After reminding readers that Daniel Lyons “has always been an ass,” which is a bit more charitable than our usual description of him ( royal asshole ), Daring Fireball’s John Gruber gets into the meat and potatoes of his analysis of the Google-Motorola deal:
“Maybe Google really did want those Nortel patents, and when they didn’t get them, they knew they were in a worse position than ever, patent-wise, with Android,” Gruber writes. “And then Motorola started threatening — publicly, just this month — to wage patent warfare against other Android handset makers. And started talking about support for Windows Phone. We now know that while Motorola CEO Sanjay Jha and badass 11-percent-of-the-company shareholder Carl Icahn were making these threats to wage a patent civil war against other Android handset makers, they were actively negotiating with Google on a buyout. Does anyone, Lyons included, think it’s a coincidence that these stories — not based on speculation but on-the-record statements by the CEO and the company’s biggest shareholder — came out one week before this acquisition was announced?”
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“That’s not to say it wasn’t a bold, brash move, or even to say it wasn’t the right move for Google and for Android as a platform. But that’s all relative to the position Google was in — and that position was a weak one, and to pretend otherwise is to deny the obvious,” Gruber writes. “And don’t forget that it leaves Google in a tenuous situation with the two leading Android handset makers, Samsung and HTC. I think Apple and Microsoft probably feel pretty good, competitively, about having forced Google into spending $12.5 billion for Motorola — a handset maker with rapidly declining sales, no recent profits, and misguided management.”
Much more in the full article – recommended here.
MacDailyNews Take: Historically, those who play chess with Steve Jobs, a man who always seems to see several moves ahead of everyone else, have not fared well.
[Thanks to MacDailyNews Reader “Karla S.” for the heads up.]
Actually, it seems to me that it was Icahn, not Jobs, who made an absolutely brilliant tactical move here. Think about it: Motorola is dying. What do you do with a dying company? You sue using your patents. Icahn is no fool. He knew Google couldn’t stand by and let Motorola sue their other Android manufacturers. He turned a worthless, dying company into $12.5 billion. Pretty clever, if you ask me…
BTW, those 17K patents? Probably most of them are for the StarTac and Rokr designs. 😉
Sounds very plausible, macman1984. Icahn (iCahn?) boosted the value of a flagging company by leaving Google, in its desperation to defend Android, without a viable alternative. Only time will tell if any of that 17K patent portfolio will be useful against Apple or other competitors.
Those 17K patents didn’t protect Motorola from Microsoft ($5/handset sold), I doubt they’ll be any more effective at protecting Google from Apple.
That 5 bucks was the result of HTC capitulating. Motorola vs. Microsoft is still winding its way through the courts.
Ah. My apologies.
iCahn until recently. Now known as iCahnFuckGoogle.
Icon didn’t do a thing. Sanjay Jha is the genius. He gets a $62M parting gift when he leaves, and he got Google to overpay by billions!
The only thing brilliant for Icahn is that he got a premium price for his declining shares. This had nothing to do with Motorola continuing as a handset maker, or the good of Android, etc. It had to do with Icahn making a profit and getting off a sinking ship.
I hope no one uses the hockey metaphor; it’s stale at best.
So Ichan moved the puck from his backhand to his forehand and went cookie jar on Google. Is that what you meant?
more like the NY Rangers blowing their salary cap on past their prime players so they could suck for several years…
BTW the wayne gretzky quote never gets stale.
It was pretty stale when Steve Ballmer used it at the USC Graduation a couple of months ago.
Ballmer should have been a hockey goalie…he fills the net like no other lard-arse. Shut-out at every game except those he gets excited at and does a monkey dance…..
Would his bald head alone be enough to deflect the path of the hockey puck?
the MMI patents may help Google against phone makers, including Apple, but I see no way how they could possibly help against Oracle.
I like the fact Steve Jobs and Carl Icahn nailed Google to the tune of $12.5 billion by scaring them into believing Android would be killed by the new iPhone and Icahn’s Motorola investment suing Android manufactures for IP abuse.
I like it a lot.
Investor Carl Icahn needed access to that $12.5 billion more than Giggle needed it.
Go Carl for faking Giggle out, yo da man.
I love Gruber’s footnote (via Horace Dediu: “is Android itself even profitable? As of today Google is another 12.5 billion dollars in the hole on the endeavor. That’s a lot of mobile ads to sell.”
Android as a whole generates $1 billion a year in advertisement revenues, of which fully 50% comes from iOS. It’s not profitable when you take into account development costs, cost of hosting the various online stores, R&D cost and soon to come, licensing costs to Oracle. Google generates 1% of its bottom line from mobile search and 99% from desktop search. In a way Chrome OS is more valuable as a potential source of revenue. They’ve just dug a $13 billion hole which it is estimated will take them 13 years to recover.
Apple could help make that hole deeper by blocking Google ads using iOS and Mac OSX thereby cutting Giggle’s revenue stream off right at the roots.
Four words explain why Apple doesn’t do that: Justice Department, Antitrust Division.
Fandroid lifted Java code line for line. Something tells me this won’t change a thing.
I think Icahn did a pretty clever move on Google by getting them to cough up $12.5B for a dying company.
However, besides have a wallet that is $12.5B lighter, what will really hurt Google in this deal is inheriting not just a dying company, but 19,000 employees from a totally different corporate culture. Good luck with that Google.
Plus, how long until Moto support adopts Google’s absolutely wonderful support?
If you own a Moto phone now, you might want to get that traded in for another brand.
One thing is now certain. Before Google even begins to use Motorola hardware to compete against HTC, Samsung, LG and others, it will direct their entire legal team to carefully read through the whole lot of 17,000 patents and identify every single one that can be used to sue Apple.
Before there is a first Google-branded Icecream Sandwich Moto phone, there will be several dozen fresh new patent lawsuits against Apple. The only question is, will these suits have any merit?
The short answer is no, for two reasons. The majority of licensable patents will already have been licensed to third part manufacturers as they predate the smartphone era and is mostly limited to 3G technology, baseband radios and some microkernel controllers for waveform propagation. The second of which is that any residual licenses will impact on the operation of feature phones which the Nokia patents cover for which Apple is paying a licensing fee and which they share a certain amount of commonality.
If moto had any patents don’t you think they would have used them for leverage in their current patent fight with Apple?
If the Google business model was like a Rube Goldberg device before, now it is even more complex. They will have to treat every moto project like an archaeologist sifting carefully through the sand making sure to preserve everything. Too many products, too many moving parts, too much complexity.
I hope that Apple or another company gets into search, because google search results ain’t that great. Google favors popular content rather than quality, factual content and it is time for a smarter search engine. Now is a great time while google has its eye off the ball.
Smartphones are 80% computer and 20% phone.
Apple & Microsoft do computer software. Apple and Motorola does computer hardware. Apple and Microsoft do phone software.
Who, besides Apple, has the most relevant patents for Smartphone/Computers.
Google wanted to scare, but the only thing they managed to do is evidence how scared they really are.
Don’t miss this devastating piece by MG Siegler in response to Dan Lyons name calling: http://parislemon.com/post/8964980217/rope-a-dope-indeed.
My favorite quote: “…over the past two years, would you have gained more knowledge by reading Lyons, or by having your head up your own ass? Tough call.”
Such fun!
The next year or so just got much more interesting for us technology fans and watchers.
how come no one has willfully infringed on Google’s search patents and call them on their bluff on ‘bogus’ patents, innovation, and all that spiel. I seriously think Apple has a search engine in the works. It’s just not up to SJ’s standards yet so they’re sitting on it. I think a top down approach to search engines is a must rather than the scattershot SEO indexing done now.