“By now all of the pundits and analysts have weighed in with their ideas of why Google (GOOG) bought Motorola Mobility,” Andrew Seybold writes for Forbes. “Most believe, as I do, that it was about Motorola’s patent portfolio.”
“Google has finally come to realize that in the wireless world patents are needed not only to protect your own Intellectual Property (IP) and to charge royalties to other companies that want to make use of the technology, but more importantly, patents are for bartering with other companies,” Seybold writes. “If you have a technology that infringes on someone else’s patent you can trade licenses and usually gain access to their IP in exchange for some of yours.”
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Seybold writes, “Google was blind-sided during the Nortel patent sale and there is a lot of competition for the InterDigital patents, so I am sure the Motorola deal is perceived by Google as a huge win…I should be looking at Google’s purchase of Motorola Mobility as a brilliant move yet I am not… To me the real winners in this deal could be Apple, RIM, Microsoft, and even HP. They all have operating systems, and some of them (Apple, RIM, and HP) also make wireless devices. All of them have watched as Android roared onto the scene and grabbed market share. All of these companies will now get a breathing spell since I believe the number of new Android-based phones will slow to a trickle with the exception of Motorola’s offerings. I believe the Android market share will fall, not continue to rise, and I think this is where Google miscalculated badly.”
Read more in the full article here.
Larry, are you still playing with the “Pi” number to make your bets? looks more like you are using the “pee”.
Still thinking Apple, Microsoft, Rim and the other pay so much for the Nortel Patents? Think again…
Is 4 times pi 12.5 billion?. Close.
Hmmmmmmmm
Round Off, One Two!
Round Off, Three Four!
Twelve Point Five Out da Door!
When you factor in MM’s enormous baggages, then it would be even more expensive for Google liking. MM is an albatross of a bygone era.
This is quite a prediction by Andrew Seybold. It will be interesting indeed to see whether he is correct or not. One thing is becoming increasingly clear however, and that is that U.S. patents seemed to have been issued willy-nilly for the last several years. Will any of the litigants be able to achieve a clear victory, or will the lawyers be the only clear winners?
That is not clear at all. That is a propagandistic statement from people who want to steal from others.
Patents are not issued willy-nilly and they are not easy to get. Frivolous patents, by the way, get you nothing because you cannot use them as a bargaining chip because they will not stand up in court.
So, the only useful patents are genuine ones and those are hard to get without coming up with something really genuinely new.
Google has shot its bolt. It remains to be seen if this merger will produce the fruits of its labor.
interesting analysis. I was thinking along the same line. I don’t see this as anything more than Google “zuning” the other android licensees.
Just out of the blue, is there any reason for Google to go after and buy another android handset manufacturer, legal issues not withstanding? Like HTC. I realize that there are a slew of existing relationship issues that will arise from this path, but what if…
Motorola Mobility makes the set top boxes for satellite and cable. Imagine using these to provide cloud TV as well as wireless and cable modem services all in one box. Its not about the patents, its about the combined mobile and set top hardware combined with the Google software.
You mean like AppleTV?
No different.
Think google Tv in a comcast DVR.
Just anecdotal evidence on how bad Motorola is at building devices.
At&T came by to hook up broadband up to my business office. I had to modems connected, yet they had to go thru 5 modems to find 2 that would sync.
Motorola and GOOG is going to be a great boondoggle to watch!
*gets popcorn ready
Right, since the cable companies love GoogleTV, they’re going to let Google stick their software on Motorola’s STB. And, if this is what they were thinking, why pay $12.5B to buy Motorola? Just strike a deal with Motorola.
Motorola and Motorola Mobility are two separate companies. The only connection is the name. Not likely will Google hold sway on set tops or anything else that is not ‘mobile’.
“By now all of the pundits and analysts have weighed in with their ideas of why Google (GOOG) bought Motorola Mobility” — not. Even. Close.
Anyone starts off proclaiming that they’re the final word on any matter, while the evidence suggests something completely different, loses a lot of credibility right off the bat for me.
Besides which, it would have been nice if the opinion piece had an original view or a few facts to substantiate his claims better; it just feels like regurgitating the same notion many have already hedged in with (Google stock has been on the decline since the news) or weighed in with better/original insights (Horace Dediu).
Google may be thinking that this Motorola deal gives them the tools to become Vertical like Apple. But they can”t have it both ways. to compete with Apple as a “all the widgets ” manufacturer like Apple would mean that they are also competing unfavorably with their so called partners.
Good Luck, Mr. Greedy
Most observers could be really missing it here. Patents, yes, but what google is likely doing is carrying its imitation of Apple to the next step. In time, they are truly going to drop their Android partners and become the exclusive Android maker. There wasn’t any money in giving away the operating system and they will figure out how to still keep their mobile advertising business. But can they make a phone people want to own without the patents they and Motorola are being sued for? Or will they become Zuned like the other tablet makers.
As desperate as this deal was do you guys honestly think Page is done? There’s more to come. Question is, will Apple still be able to outfox Google?
Are you joking? Page is a schoolboy playing against a grand master. So far, Apple has (with some help from MS), cost Google over $20 billion (Price of MMI stock hit future write-offs) to defend their “free” mobile OS. Within six months the Android partners are going to be looking for the door. Maybe Google will put something compelling together with MMI, but that only happens if it survives the patent war to come.
There will be Harvard Business School courses devoted to this trainwreck in the future.
I agree with the analysis that Google has just “Zuned” (PlayedForSure) its partners other than Motorola. If I were HTC or Samsung I’d be burning up the phone lines to Microsoft to procure a new OS.
However, Apple was in the process of filing suit against Motorola when Motorola filed preemptively against Apple. Motorola’s patents won’t be much protection for Android since Apple was already suing Motorola for patent infringement. Big mistake on Google’s part.
Thirdly, let’s address the “common wisdom” that the patent system is broken. This is an argument put forth with the same fervor and unreasoning belief as “We’d be OK if the government just got out of our way”. The patent system is not broken. It’s simply been ignored by players who thought they could get away with it. The waters have been muddied further by companies with one employee who gain ownership of orphan patents in the hopes of suing somebody to get rich quick. It’s time for the amateurs to pay attention to patent law, and Apple is forcing them to do just that.
No its broken.
Lodsys and companies that are in existance to only extort others over “ideas” that exist only on paper is the result of a truly broken system.
The patent system is not broken. The general principle applies. You infringe a patent, you pay the penalty. Lodsys is a rare, bad example. They havent won anything yet and it’s doubtful if they’ll win anything. Google doesn’t seem to realize that replicating patented material in your product without first seeking the consent of the patent holder is wrong. They’re slowly coming round to the view that they’re not above the law and have just paid $12.5 billion for the privilege of learning that fact.
Yes… it is broken, but because of Lodsys and others like them.
Even before the tidal wave of patenting of what is now called “intellectual property”, many people were torqued off about how the Patent Office was handling things. Too much (probably most) of IP patents are patents on “ideas,” which patents were never supposed to cover.
IMO, “intellectual property” should be protected by copyrights, not patents…. and for the same amount of time as original U.S. legislation set up. All copyright extensions since then should be revoked.
As for Zeke’s notion that “We’d be OK if the government just got out of our way” is an unreasoning belief, all I can say is that human history show otherwise. Trust in the state is a greater self-delusion than the notion of security.
Unfettered capitalism, which is what you and the Conservative commentators seem to long for gave us the following:
The 19th century robber barons, the Great Depression, the Savings and Loan scandal, Enron, Tyco, the recent banking collapse, Bernie Madoff, and the CEO of Goldman-Sachs taking home $20M in salary and bonuses in 2009 after accepting taxpayer bailout money.
Government regulation was put in place originally for good reasons. Removing it has reminded us of those reasons, but only after the fact. These have been expensive lessons.
Let’s not refer to Lodsys as “they”. It’s a one employee company that has never invented, manufactured, or marketed anything.
I have no problem with someone buying patents and then licensing the IP to others. It is the penchant exhibited by Lodsys and others to stretch the bounds of credibility in applying their inventories of patents to existing products in the hopes of getting lucky. These trolls clog up the court system and cost legitimate manufacturers time and money to defend against these suits. I’d be for awarding substantial damages against plaintiffs for frivolous suits and for tightening up the definition of “frivolous”. That would go a long way toward cleaning up the mess.
Only people that have not invented anything would dare say that they are not interested in patenting it once they do invent it.
That is exactly my issue with companies like Lodsys and why i feel the system is broken.
Lodsys has not invented anything. All they have done is drawn up diagrams and flowcharts of an idea. That is not invention and that does not even take much skill.
You can draw up a ‘design’ for anything on paper, actually making it into a physical device or mechanism that functions as intended is a whole different realm.
How much would anyone like to bet that when you pay a company like Lodsys a ‘license fee’ you don’t get anything in return other than a promise note signed by them that says “thanks for the money, now we won’t sue you”….
It would be one thing if you received source code, or a library with an API to code against but that is not how it works because these scum do not have any of that. They never ‘invented’ anything.
Shouldn’t be long before we start seeing Google stores in the malls.
“Shouldn’t be long before we start seeing Google stores in the malls.”
All Giggles has to do it buy Tandy out to take over the Radio Shack stores for an instant presence in the marketplace.
Companies just do not routinely make 12 to 13 billion dollar mistakes. A lot of competent people studied this deal and passed on it.
Where they all blind?
It wouldn’t be the first time a company, with a lot of competent people, made a mistake like this.
Apple had a lot of competent people when they decided to license Mac OS to other hardware makers. Palm had a lot of competent people when they decided to split hardware and software divisions into separate companies. I could think of many more. These competent people are still just people.
Time Warner and AOL had lots of competent peo…wait, nevermind…
So these Google scum bags buy a bunch of patents so they can blackmail Apple to not sue them for stealing iOS.
Tech scum, worst than Micro$hit in it’s hey days.
Wow. Does anyone realize that Google gives away android???? Market share means nothing as it relates to Google revenues / expenses. Actually, purchasing Moto is means to actually monetize some android revenue and profit outside of advertising and search.
If google was really concerned about android fragmentation, another benefit here is so many of the other companies leaving. Google may end up with a very short list of much higher quality licensee’s leaving the down market to Windows 7, or 8 or whatever it is.
I am sorry ahead of time for what I am about to post but these political trolls are annoying, and I feel like a fight…
So is GOOG run by the Tea Party, only people so desperate would throw such money away on a BAD, BAD gamble.
Tea Partiers would have purchased a gun manufacturer.
What all the people who say this is not good for Google fail to explain is – what alternatives do HTC, Samsung, LG, etc have…? Clearly Windows # whatever is not resonating in the market at the moment. Clearly it seems as if they all just got Zuned.. But jumping from Google to Microkia for the above mentioned manufacturers is liking choosing which way you want to be slapped in the head. You might as well stay with the method that is at least making you money.