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Was Google's Motorola Mobility Acquisition a Mistake?

Nerval's Lobster (2598977) writes | about a year ago

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Nerval's Lobster (2598977) writes "When Google first announced its Motorola Mobilty acquisition in August 2011, some analysts saw it as a spectacular coup. In exchange for $12.5 billion, the search-engine giant gained a hardware division and a boatload of patents. Those patents, in turn, could prove very useful in the ongoing intellectual-property wars between Google and many of its rivals, including Apple and Microsoft. Even before the Google acquisition, Motorola Mobility was engaged in a major legal battle with Microsoft, insisting that the latter needed to pay around $4 billion per year if it wanted to keep using Motorola’s patents related to the H.264 video and 802.11 WiFi standards. (The patents in question affected the Xbox and other major Microsoft products.) Had that lawsuit succeeded as Motorola Mobility originally intended, it would have made Google a boatload of cash—but on April 25, a federal judge in Seattle ruled that Microsoft’s royalty payments should total around $1.8 million per year. “Based on Motorola’s original demand of more than $4 billion per year from Microsoft,” patent expert Florian Mueller wrote in an April 26 posting on his FOSS Patents blog, “it would have taken only about three years’ worth of royalties for Microsoft to pay the $12.5 billion purchase price Google paid (in fact, way overpaid) for Motorola Mobility.” This latest courtroom defeat also throws into question the true worth of Motorola Mobility’s patents. After all, if the best Google can earn from those patents is a few pennies-per-unit from its rivals’ products, that may undermine the whole idea of paying $12.5 billion primarily for Motorola Mobility’s intellectual-property portfolio. And Google, perhaps reluctant to alienate its manufacturing partners, hasn’t positioned Motorola Mobility as the premier Android device maker; indeed, Motorola hasn’t launched a flagship smartphone or tablet in quite some time, even as Google relies on other manufacturers to develop its Nexus products."
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