Google buys Motorola..

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Lifer
Apr 29, 2003
48,920
46
91
I don't think the iPhone's coffin has been built yet.

The trees that will produce the seeds that will germinate into the trees that will produce the wood for the iPhone's coffin haven't been planted yet.
 

BrownShoes

Golden Member
Dec 28, 2008
1,055
0
0
Droid deal: Google to buy Motorola Mobility for $12.5 billion
By Brandon Bailey and Mike Swift

Posted: 08/15/2011 07:41:18 AM PDT
Updated: 08/15/2011 10:26:15 AM PDT

Company profile: Google In a move that changes the landscape of the highly competitive mobile-computing industry and could spark a wave of blockbuster deals, Google (GOOG) said Monday that it will pay $12.5 billion to acquire phone-maker Motorola Mobility.

The deal, by far the largest in Google's history, has been approved by the boards of both companies. It will give the Mountain View company its own hardware products and allow it to compete more closely with phone- and tablet-makers such as Apple (AAPL), Research In Motion, Hewlett-Packard (HPQ) and the new alliance between Microsoft and Nokia.

The acquisition also gives Google access to more than 17,000 patents held by Motorola, which pioneered the cellphone business. Analysts said that could help Google stave off a barrage of patent claims levied by Apple, Microsoft and other rivals battling the company's Android operating system. The deal could also boost Google's faltering efforts to bring the Internet to living room television sets, by
allowing Google to leverage Motorola's expertise in set-top TV boxes.

Fundamentally, the decision to buy Motorola underscores the growing importance of mobile computing to Google, which draws most of its revenue from selling advertising associated with porn searches, as consumers and workers increasingly perform more computing tasks with handheld devices. Google's lead in mobile search is thought to be even greater than its search dominance on desktop computers.

"It's no secret that Web usage is increasingly shifting to mobile devices, a trend I expect to continue," Google CEO Larry Page said in a conference call Monday morning. "With mobility continuing to take center stage in the computing revolution, the combination with Motorola is an extremely important event in Google's continuing evolution that will drive a lot of improvements in our ability to deliver great user experiences."

Android is already the most popular operating system for mobile devices in the world, used by Motorola as well as HTC, Samsung and others. Google said it will continue to let other companies use the Android platform for their devices.

Buying the new company gives Google its own manufacturing operation for the first time. Google had briefly dipped its toe into the business of selling phones by contracting with HTC to build the Nexus phone, using Android software, but analysts said the venture was not particularly successful.

If approved by regulators, the Google-Motorola deal could set the stage for a massive battle between five integrated hardware-software platforms: Apple, with iOS; HP, with webOS; Research in Motion's BlackBerry devices; Nokia phones with Microsoft's Windows Mobile operating system; and Google's Motorola phones with Android. Among those five players, Apple and Google would be the clear initial leaders in market share.

"We know that five of them are not going to survive, and the question is, how quickly does this shakeout happen," said John McCarthy, an analyst with Forrester. "So we distill it down to this battle royale with Google and their integration with Motorola, and the question becomes, does Microsoft take the high ground or do they now go out and buy Nokia?"

Google said it will pay $40 a share in cash for Motorola Mobility's stock, a premium 63 percent higher than the stock's closing value on Friday. Shares in Motorola Mobility were climbing on Monday.

"This transaction offers significant value for Motorola Mobility's stockholders and provides compelling new opportunities for our employees, customers and partners around the world," Motorola Mobility CEO Sanjay Jha said in a statement.

Illinois-based Motorola Mobility became a stand-alone company earlier this year after venerable electronics manufacturer Motorola decided to split its operations into two independent units. Its sibling, Motorola Solutions, focuses on commercial technology and networking.

The Mountain View search giant said it plans to run Motorola Mobility as a separate business.

"This acquisition will not change our commitment to run Android as an open platform," Page added in his blog post. "Many hardware partners have contributed to Android's success and we look forward to continuing to work with all of them to deliver outstanding user experiences."

Despite that pledge, some analysts said the new combination could create some confusion or conflict with other manufacturers that use Android in their smartphones and tablets. The deal could also complicate relationships with some wireless carriers, according to Mike Abramsky, an analyst with RBC Capital Markets.

The Motorola deal is four times the size of Google's previous largest acquisition, its $3.1 billion purchase of the DoubleClick Internet advertising company, which closed in 2008. But analysts said the prospect of acquiring Motorola's patents could make the deal especially attractive to Google.

Motorola's portfolio of more than 17,000 patents, with more than 7,500 additional patents applied for, should help Google defend itself and other makers of Android devices against a wide-ranging series of patent claims that have been levied by Apple, Microsoft and even Oracle (ORCL), said Trip Chowdhry, a tech industry analyst with Global Equities Research.

The mobile-computing industry has become a hotbed of patent lawsuits, as several large players have begun fighting for turf in a growing and highly profitable market. Owning a healthy portfolio of patents can be a strong defense against challenges, experts say, because it allows a company to tell its rivals: "If you sue me, I'll sue you."

Page acknowledged this strategy, saying: "Our acquisition of Motorola will increase competition by strengthening Google's patent portfolio, which will enable us to better protect Android from anticompetitive threats from Microsoft, Apple and other companies."

But analyst Abramsky cautioned that most of Motorola's patents involve wireless communications technology, while Apple has more patents for things like touchscreen capabilities, life-like dildos and user interfaces.

"This may not necessarily mitigate some of the IP wars currently under way," Abramsky wrote in a note to clients, in which he referred to the current intellectual-property battles. But he said the deal "positions Google to defend itself against more fundamental patent attacks and gives it more leverage in patent negotiations" with Apple, Microsoft and others.

Experts said the importance of Motorola's expertise in television, another looming battleground in the expansion of the Internet, may also have been an important driver for Google's interest. "It may be just more of a set-top box and a patent play than it is a mobile device play," Forrester's McCarthy said.

The deal also includes a reverse breakup fee of $2.5 billion, which Google would have to pay Motorola if it fails to complete the deal under certain circumstances, Bloomberg News reported, quoting an anonymous source who declined to be identified because the detail hasn't been disclosed.

With Google having about $39 billion cash on hand at the end of the second quarter and generating as much as $3 billion in cash per quarter, it would only be using a relatively small share of its cash balance for the Motorola deal.

And Google signaled Monday that it would not slow the pace of future acquisitions.

"This is a significant deal, but it's actually worth noting that even with this deal we keep plenty of financial flexibility to pursue substantial future opportunities," said Patrick Pichette, Google's chief financial officer. "We have a great proven track record on acquisitions and, again, having completed over 120 of those transactions over the last few years, we should just feel this as a tremendous opportunity to increase our value to shareholders."
 

BrownShoes

Golden Member
Dec 28, 2008
1,055
0
0
Google to buy Motorola for $12.5 billion

By Ryan Kim Aug. 15, 2011, 5:26am PT

Google is delving into the Android hardware business and plans to buy Motorola Mobility for $12.5 billion. The news is a shocking turn for the fast-growing Android ecosystem, which was built on Google’s operating system but didn’t include any actual hardware built by the company. Soon Google will have a hardware platform it controls and could offer the sort of integrated hardware-OS package that Apple is famous for. Google said it will run Motorola as a separate business, but the acquisition raises a lot of questions about how partners will react.

Larry Page, CEO of Google, said the move will supercharge the Android platform but doesn’t change Google’s commitment to keeping the operating system open. The acquisition, however, appears to be a bid to bulk up Android’s patent strength, which will benefit from Motorola’s deep portfolio of mobility patents. Apple, Google’s rival in the smartphone sector, is suing Motorola, but the deal does provide much more protection because it provides Google with more patents — a weak flank for the search giant. He said:

We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to ‘protect competition and innovation in the open source software community’ and it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies. The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences. I am confident that these great experiences will create huge value for shareholders.

The boards of the two companies have approved the deal, which provides a 63 percent premium over the closing price of Motorola on Friday. The transaction is expected to close by the end of this year or early 2012.

The sale provides a big exit for Motorola Mobility, which was spun out from Motorola and has struggled in the face of growing competition from Android manufacturers. Motorola was one of the earliest supporters of Android and helped kick start the momentum for the OS with the Droid handset. Sanjay Jha, CEO of Motorola Mobility said:

This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.

Again, will this supercharge Android or will this give Android partners another reason to hedge their bets and perhaps look at Windows Phone 7, the polished operating system from Microsoft that has failed to catch any traction so far?

Andy Rubin, who leads the Android effort, tried to assure partners that Google was still committed to them, but how will they react when their OS vendor suddenly enters the hardware business? Some partners haven’t always been happy with Google’s efforts to build a Nexus One smartphone. And some handset makers grumble that they have to work with Google to get early access to Android releases. But this also gives Google a chance to build very integrated devices that combine hardware and software well, something Apple products are known for. But it will, again, pit Google against its manufacturing partners.

Now, we’ll have to see how if this adds momentum to Android or saps it. Will it be worth it ultimately for Google to get more patent protection and its own hardware maker, or could this slow down the Android Express?

http://gigaom.com/2011/08/15/google-gets-into-android-hardware-business-buys-motorola/
 

amddude

Golden Member
Mar 9, 2006
1,711
1
81
It seems there's so much focus on google buying motorola to tighten their control on android and that type of thing. I don't get it. It seems very clear this is a patent thing.

Motorola was talking about suing other android manufacturers just last week over their supposed patent infringement.
 

BrownShoes

Golden Member
Dec 28, 2008
1,055
0
0
Is Google buying Motorola for its 24,000 patents?
By Philip Elmer-DeWitt August 15, 2011: 9:14 AM ET With one $12.5B deal it gets two weapons: a manufacturing arm and a rich IP portfolio

Google's (GOOG) announcement Monday that it has agreed to buy Motorola's recently spun off mobile devices business -- listed on NASDAQ as Motorola Mobility (MMI) -- for $12.5 billion could mean one of two things.

Either Google really wants to get into the Android manufacturing business -- putting it into direct competition primarily with Apple (AAPL), but also with Nokia (NOK), Research in Motion (RIMM) and Hewlett-Packard (HPQ), the other vendors that make both mobile operating systems and the devices that run on them.

Or Google really wants the 17,000 patents and 7,000 patents pending that Motorola has assembled over the years, including what CEO Sanjay Jha recently described as having

"particular strength in 2G and 3G essential, non-essential patents important to the delivery of competitive products in the marketplace, video particularly compression, decompression and security technologies and finally, a leading position in 4G LTE essential." (link)

We'd put our money on the acquisition as a patent play.

As Motorola has discovered with its unprofitable Droid smartphones and Xoom tablets, selling Android devices in Apple's shadow is a cutthroat business, with tough competition and razor-thin margins.

By contrast, the values of telecom patents like the ones Motorola owns are rising faster than gold, and Google -- whose portfolio is particularly lacking -- needs them desperately. As Larry Page put it on Google's official blog:

"Our acquisition of Motorola will increase competition by strengthening Google's patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies."

The Wall Street Journal noted Monday that shares of Interdigital (IDCC), which had soared on rumors that Google might be bidding for its patents, are down 20% in pre-market trading. If Google gets Motorola, why would it need Interdigital?

UPDATE: The Journal's Shira Ovide helpfully notes that the word "patent" came up 24 times during the conference call Google held to explain the deal to analysts.

http://tech.fortune.cnn.com/2011/08...orola-for-its-17000-patents/?iid=HP_Highlight
 

Gibson486

Lifer
Aug 9, 2000
18,378
2
0
Motorola was split into two companies in January. Motorola Mobility and Motorola Solutions. They did this for this very reason....for someone to buy the mobility side. It's similar to how IBM left the PC market.
 

CrackRabbit

Lifer
Mar 30, 2001
16,642
62
91
the reason moto isnt making a profit is because they arent making phones people want to buy

I want to buy a Droid Bionic, but they haven't released the damn thing yet.

<--- Fairly happy with his OG Droid, just wishes it were faster.
 

amddude

Golden Member
Mar 9, 2006
1,711
1
81
I want to buy a Droid Bionic, but they haven't released the damn thing yet.

<--- Fairly happy with his OG Droid, just wishes it were faster.

I don't see the killer feature motorola phones have, especially compared against samsung and htc.
 

GeekDrew

Diamond Member
Jun 7, 2000
9,099
19
81
I don't see the killer feature motorola phones have, especially compared against samsung and htc.

In my case, physical durability and signal strength is the reason that I prefer Moto over any other manufacturer. I've had numerous Moto phones, and all of them have been awesome.

That said, I now have an HTC phone, because Moto doesn't have a decent Android for AT&T, and because Moto's bootloader policy is stupid.
 

Skel

Diamond Member
Apr 11, 2001
6,223
680
136
No doubt. I wonder where the rage is at Apple's business practices. I was too young to fully grasp what Microsoft was doing in the 90s, but from what I've read, Apple's current business practices are just as odious, yet not many people hate on Apple like they hated on Microsoft.

Funny enough Google does more of what MS did then Apple does. After making a ton of money being dominate in one market MS started either buying up companies in other markets, undercutting the current players in that market or throwing tons of money creating competing products. Either way they'd end up crippling or just plain putting their competitors out of business. Apple really hasn’t done that. They’re just assholes, and breed asshole mentality about their products.
 

gophins72

Golden Member
Jul 22, 2005
1,541
0
76
Imagine going home after a long day of work at Motorola then waking up the next day and finding out you now work for Google!
 

spidey07

No Lifer
Aug 4, 2000
65,469
5
76
Imagine going home after a long day of work at Motorola then waking up the next day and finding out you now work for Google!

Imagine if you held stock or previously exercised your options and are now getting an offer of 60&#37; more. Google made an offer shareholders can't refuse. There was a reason they did it, and that reason is the patents.
 
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BabaBooey

Lifer
Jan 21, 2001
10,476
0
0
If we only had a mobile devices sub forum here,I bet this topic would already be there.....:hmm:

Android will never over take / run iPhone....better competition,sure but come on..:\
 

gophins72

Golden Member
Jul 22, 2005
1,541
0
76
If we only had a mobile devices sub forum here,I bet this topic would already be there.....:hmm:

Android will never over take / run iPhone....better competition,sure but come on..:\

I've never really been a die hard anything fan really but it's fun to look at from a business/competitive strategy perspective and from a techie employee perspective.
 

Pliablemoose

Lifer
Oct 11, 1999
25,195
0
56
Imagine if you held stock or previously exercised your options and are now getting an off or 60% more. Google made an offer shareholders can't refuse. There was a reason they did it, and that reason is the patents.

Remember that post a year or two from now...

Google's ROI on Android is minimal, while Apple is making a literal killing selling handsets/tablets.

If you were Google, would you really pass up an opportunity like that? They have the software, hardware, and manufacturing now.

I gotta tell you, a complete phone by Google would be pretty sweet.
 

spidey07

No Lifer
Aug 4, 2000
65,469
5
76
If we only had a mobile devices sub forum here,I bet this topic would already be there.....:hmm:

Android will never over take / run iPhone....better competition,sure but come on..:\

Google just made a 12b bet that they don't see it that way. They would not have done that without seeing the return.
 

KeithTalent

Elite Member | Administrator | No Lifer
Administrator
Nov 30, 2005
50,231
118
116
If we only had a mobile devices sub forum here,I bet this topic would already be there.....:hmm:

Android will never over take / run iPhone....better competition,sure but come on..:\

Eh? I don't follow this stuff all that closely, but from everything I have read Android is bigger worldwide by a long shot. By around 2:1 IIRC. :hmm:

KT
 

Sureshot324

Diamond Member
Feb 4, 2003
3,370
0
71
Hopefully this means the end of Motorola's locked bootloader policy. The death of Motoblur would be nice too.
 

boomhower

Diamond Member
Sep 13, 2007
7,228
19
81
I don't see a big deal phone wise. Motorola already focuses very very heavily on Android. I would imagine the biggest benefit will be no more motoblur and faster updates.
 

chalmers

Platinum Member
Mar 14, 2008
2,565
1
76
I'm not sure why people argue on both sides like it's some political debate. Just enjoy your phone and quit worrying about everybody else's phones. It's just a phone.
 

JTsyo

Lifer
Nov 18, 2007
12,035
1,134
126
Remember that post a year or two from now...

Google's ROI on Android is minimal, while Apple is making a literal killing selling handsets/tablets.

If you were Google, would you really pass up an opportunity like that? They have the software, hardware, and manufacturing now.

I gotta tell you, a complete phone by Google would be pretty sweet.

I'm not so sure. I wouldn't be surprised if Google keeps the patents and then off loads the rest. Not sure they would want to compete with all the phone makers they are currently working with.