Google’s risky deal: Benefits of snapping up Motorola Mobility not patently obvious

“Google is hoping to secure the long term future of its business — by turning that business on its head,” Rolfe Winkler and Martin Peers report for The Wall Street Journal. “With its proposed $12.5 billion acquisition of Motorola Mobility, Google is jumping into a lower-margin, cut-throat hardware business. Even for a company with as varied ambitions as Google, this is a risky deal.”

“Google’s willingness to buy Mobility highlights how much it needs to protect its Android mobile operating system, now caught up in a raging patent fight,” Winkler and Peers report. “Along with other Android-powered handset makers such as Samsung and HTC, Mobility has been sued for patent infringement by Apple and Microsoft.”

Advertisement: Limited Time: Students, Parents and Faculty save up to $200 on a new Mac.

Winkler and Peers report, “Google’s deep cash resources should strengthen Android’s legal defenses. Moreover, Google will inherit Mobility’s portfolio of 17,000 patents, a critical intellectual property weapon. But the risks are significant. Google’s ownership of Mobility could undermine what has been Android’s big advantage: namely, the support it gets from multiple handset makers… Even settling the patent lawsuits could be harder, argues patent expert Florian Mueller. Google may want to use Mobility’s patents to negotiate a settlement that covers all Android handset makers. For Apple and Microsoft, agreeing to an Android-wide settlement may be unpalatable.”

Much more in the full article here.
 

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Related articles:
Why Google’s purchase of Motorola Mobility is a white flag of surrender, and how Apple won the future of tech – August 15, 2011
Winners and losers in the Google-Motorola deal – August 15, 2011
Google’s Motorola move underlines Apple’s Android advantage – August 15, 2011
Google had to gobble up Motorola Mobility – and it could end up being a disaster – August 15, 2011
Google to buy Motorola Mobility for $12.5 billion to bolster patent portfolio – August 15, 2011

25 Comments

  1. “For Apple and Microsoft, agreeing to an Android-wide settlement may be unpalatable.”

    Especially as there is no such thing as “Android”, in the sense of a uniform system to which any finding could apply seamlessly.

  2. $12.5 billion to get into the cutthroat, low margin hardware business. Couple that with a free (as in worthless) java-based operating system and you have yourself a very successful business plan that will soon overtake Apple in both profits and revenue.

    It’s about as likely as a sincerely apology from Bill Gates for ripping Apple off for over two decades. Never going to happen.

  3. The real question is how many of Motorola’s patents are actually applicable to the smartphone industry? Having 17,000 patents for set-top cable boxes won’t do Google much good.

    1. According to the CEO of Moto Mobility during a conference call this morning, there are more than 17,000 patents that are related to mobile phones with approx another 7500 that are pending.

      He did not even touch on patents they hold in other technology sectors.

      The question in my mind is how many of those Patents are A) still valid and B) how many can hold up in a court of law against scrutiny.

      Guess time will tell.

      Its def getting interesting to watch the power houses do battle.

      1. There is an ongoing legal suit between Motorola and Apple. If any one of those 17,000 patents held even a smidgen of value don’t you think Motorola would have deployed them offensively by now?

        The fact is Apple could have licensed the majority of the applicable patents held by Motorola which will not be subject to future litigation. In effect Google bought a worthless trove of patents. It still doesn’t change the fact that 17,000 patents doesn’t absolve you from intellectual property theft which is what Google did. Pilfered Apple’s IP to develop Android.

        1. Actually that had come up at meetings lately from what ive heard, talk of moto sing its patents as a way of bringing income in.

          They are moving in that direction. Hopefully google stops that and uses the patents for defense.

      2. It’s not the QUANTITY of patents, it’s the QUALITY of patents that matters here. What value does holding the patent on the “tin can and string” phone have anymore? Apple said when they released the iPhone that they patented everything that was unique about it. They may not have Moto’s 17,000 patents in place on the iPhone, but I’d still rather have an iPhone …

  4. Googe’s desperation demonstrates the deep trouble that Android is in. But it could end up that Motorola is the only company that builds Android devices.

    Considering Google’s non existing track record on ethics, what device maker will believe in the story that big bad wolf Google will be nice and not eat the lonely Android phone makers in the dark forest of today’s business world.

  5. Remember how Motorola phones were before the first iPhone?
    Motorola may have a lot of patents, but none of them will protect them from copy the iPhone hardware and software design.
    Two turkeys doesn’t make an eagle.

    1. True.

      It would be interesting to see what patents are applicable here.

      Sure, Motorola was in the cell phone business long before Apple upset the industry. However, the iPhone is significantly different (iOS) but may still use plenty of the patents Motorola owns.

      The real question is which of the patents that Android ripped off are still going to be in applicable in the current lawsuits and would the merger with Motorola be enough to save them?

      Could be interesting and legally drawn out for a while.

  6. This is a tacit acknowledgement by Google that it has been ripping other’s IPs. If Google haven’t done anything wrong it wouldn’t have panicked into buying Motorola for an astronomical sum of $12.5b, hoping to mitigate its thieving ways. Google has been forced back into reality.

  7. in such a highly competitive standards based industry it is the technology portfolio that differentiates you from the competition, not the one like moto that makes you the same, that has the most value. Google needed computer and smartphone IP, not cellphone IP… they’re not going to get an injunction against apple for its radio module & baseband chips produced by 3rd parties like Qualcomm and Marvell that have their own patents and Cross licensed FRAND Patents. The patent thing is all smokescreen so their partners / future competitors don’t get scared off.

  8. Google’s hardware partners just got Zune’d.

    They must be exquisitely pissed off right now.

    I predict this will kick off the following series of events:
    1. Smartphone and tablet manufacturers will dump Android like a hot potato and run into the waiting arms of Microsoft to disastrous results, given that Windows Phone 7 and MS’s tablet efforts make consumers run screaming in the other direction like their lives depend on it.
    2. The tablets and smartphones that Google produces as a result of its purchase of Motorola Mobility will crash and burn the second they hit the market, taking Android down with them. Google has no cachet whatsoever with consumers, despite their delusions otherwise, and neither is their any love for Android outside of a few foaming-at-the-mouth ideological crusaders who are too dumb to notice that Google stands against everything they believe in, and certainly gullible enough to be taken by a cute corporate motto.
    2. Apple will seize this opportunity to absolutely maul Google and the other smartphone/tablet makers while they’re down. Several of the latter will die, while the former will be put into a state of near death from which it will never recover.

    And so have I forseen(with my amazing powers known as common sense and deductive reasoning. Maybe Apple’s “competitors” shold try getting some of that?).

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.