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Google Sells Motorola Mobility To Lenovo For $2.91 Billion 172

Posted by Soulskill
from the experiment-over dept.
_0x783czar writes "Google today announced that they will be selling Motorola Mobility to Lenovo for the sum of $2.91 billion USD. Google says the move should allow the company to receive the attention and focus it deserves in order to thrive. From the announcement: '[T]he smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices. It's why we believe that Motorola will be better served by Lenovo — which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.' Google was quick to add that this does not signal a move away from their other hardware projects. Additionally Google will 'retain the vast majority of Motorola's patents,' which they hope to continue using to stabilize the Android ecosystem. The deal has yet to be approved by either the U.S. or China."
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Google Sells Motorola Mobility To Lenovo For $2.91 Billion

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  • ouch! (Score:3, Informative)

    by Anonymous Coward on Wednesday January 29, 2014 @06:38PM (#46104673)

    That's gonna leave a mark. A -$10 billion mark!

    captcha: failure

    • Re:ouch! (Score:5, Interesting)

      by mythosaz (572040) on Wednesday January 29, 2014 @06:40PM (#46104687)

      Yeah. I need to get in the middle of one of these transactions somehow.

      Google seems willing to pay 10B to rent companies for a while...

      • by noh8rz10 (2716597)

        also, they just paid $3b for nest, wonder when they'll sell that off. seems like they're grasping at straws here.

        • by tgd (2822)

          also, they just paid $3b for nest, wonder when they'll sell that off. seems like they're grasping at straws here.

          If Nest owners could only be so lucky.

          More likely they'll go a couple years, realize its not of any use, and shut it down.

          • by ackthpt (218170)

            also, they just paid $3b for nest, wonder when they'll sell that off. seems like they're grasping at straws here.

            If Nest owners could only be so lucky.

            More likely they'll go a couple years, realize its not of any use, and shut it down.

            I remember when that was what Microsoft did on a regular basis. Must be something which companies do once they hit a certain level of revenue.

            we made fifteen billion last quarter, let's go buy the corner donut shop for three billion and then shut it in a couple of years

            • It's probably more like "Lets make a group of my friends BILLIONAIRES!"

            • big companies waste money like its going out of style. if you or I wasted like they did, we'd be homeless.

              but its 'ok' if you are a mega corp. you're 'expected' to be wasteful.

              thing is, think of all the good (for people) that could have been done if companies spent money like you and I spent money: responsibly!

              I look at corporate waste like expensive artwork in lobbies, huge logos that cost money, large buildings that they really don't need - and it annoys me that those that have so much, essentially wast

              • by Eskarel (565631)

                It isn't so much that big companies are wasteful, but that when you've reached a certain level of market saturation in your core business area the only way to expand revenue in any significant way is to expand into new business areas. You can almost think of these as new business ventures as opposed to simply purchases by a company, and most new business ventures, even those by established players, fail.

                That said, the Motorola purchase seems particularly insane, the only logical reason for Google to make th

              • But everyone here keeps telling me that Government is inefficient and wasteful and only the profit motive can create efficient services.
              • by mcgrew (92797) *

                big companies waste money like its going out of style. if you or I wasted like they did, we'd be homeless.

                No, rich people waste money like it's going out of style. Hell, a couple of meals at a NYC 5 star restaurant and I'd probably be in debt and homeless.

            • I remember when that was what Microsoft did on a regular basis.

              *Cough* Nokia *Cough*

              • Re:ouch! (Score:4, Interesting)

                by cbhacking (979169) <been_out_cruisin ... NO@SPAMyahoo.com> on Thursday January 30, 2014 @04:59AM (#46108061) Homepage Journal

                Pretty sure Microsoft will only shut down the Nokia handset manufacturing (there's more to Nokia than that, but I don't have a handy name for it like "Motorola Mobility") if they decide to abandon the smartphone OS business entirely. Which they could do, admittedly, but I'd be surprised. They've achieved a pretty solid third place in the market, with an overall marketshare similar to that of OS X among PCs. They've started being taken more seriously by major app developers. They're rolling out updates at a decent rate, and many of the crippling issues of the app model in WP7 are already fixed.

                That doesn't mean they won't spin off or re-sell that portion of the business, of course. I'd be surprised if they just killed it though, unless they want to give up on phone OSes entirely. There are at least three other OEMs making WP8 handsets (HTC, Samsung, and Huawei), but the Nokia Lumia line predominates.

        • Re: ouch! (Score:5, Insightful)

          by AvitarX (172628) <me@brandywinehund[ ].org ['red' in gap]> on Wednesday January 29, 2014 @07:12PM (#46105035) Journal

          Not at all, Motorola seems to be making better phones now, and Google has the parents. I assume the purchase was very hedging, in case android as an ecosystem didn't take off, they could try to make them alone. The need to hedge is over, Google gets some money, and a company that has proven it's ability to manage american brands is in the mix.

          Google can now release moto based nexus items (if they dream moto to be good for it), without threatening the ecosystem.

          The hedge on android probably was worth it to them.

          • Re: ouch! (Score:5, Insightful)

            by ifiwereasculptor (1870574) on Wednesday January 29, 2014 @07:52PM (#46105377)

            Not at all, Motorola seems to be making better phones now

            WAY better phones. In fact, except for problems like no SD card slots or removable batteries, I think they're making arguably the best phones in the market. Moto X is no Optimus G2 in terms of speed, but it's plenty fast, its battery lasts the whole day and it has brought something new to the table: voice commands. I think it's pretty useless, but at least it's something new. Notifications that take advantage of the AMOLED display were also cool. Moto G is simply the best value for money right now, it's putting every other phone maker to shame. Both can take a fall and are already running KitKat. If you remember Motorola had the Razr HD going against Samsung's Galaxy S3, you can recognize they improved Motorola's game immensely. Maybe Lenovo will carry the momentum, but I fear not. It's a shame, because I really liked where Motorola was going.

            • All good points, but I keep looking at the Nokia Lumia 1020 and getting jealous of that camera. It's tough these days because so many vendors have been caught paying shills for fake reviews. But I'm hoping some Android device will be as good as the Moto X in most respects and also match - or at least come close - to the camera in the 1020.
            • Yes, voice commands are mostly useless, and the the AMOLED notifications were first implemented by the trusty old Nokia N9 years ago.

            • Leave the SD cards and periferial connectors to the chinese, they fit and put pretty much anything-to-anything, im sure Lenovo will cook something good regarding those aspects
          • Re: ouch! (Score:5, Insightful)

            by icebike (68054) on Wednesday January 29, 2014 @08:18PM (#46105645)

            Not at all, Motorola seems to be making better phones now, and Google has the parents. I assume the purchase was very hedging, in case android as an ecosystem didn't take off, they could try to make them alone. The need to hedge is over, Google gets some money, and a company that has proven it's ability to manage american brands is in the mix.

            Google can now release moto based nexus items (if they dream moto to be good for it), without threatening the ecosystem.

            The hedge on android probably was worth it to them.

            Android had already captured about 75% of all hanset sales by the time the Moto Buy happened.
            So I don't think they were hedging.

            However, you might have hit the mark after all, in a slightly different way: Preventing Android from being eroded.

            Its entirely possible there was a quietly brewing manufacturer revolt going on due to Google competing with its user base by manufacturing phones.
            Samsung leaked a Tizen Phone [digitaltrends.com], and Mozilla funding a phone OS (paid for by Google, as is 95% of everything Mozilla does), and the Chinese also brewing up a phone OS, it might have come to Google's attention that getting rid of Moto might have been the best choice.

            They keep the patents, secure Android's future, and already pocketed the tax write off when acquiring Moto's debts. Win, Win, Win.

            • by Xest (935314)

              It's also possible they just wanted to prevent Moto ending up in the hands of someone non-Android friendly, like say, Microsoft as Nokia has ended up.

              By buying them they remove that threat and then have the freedom to spend time finding someone who they can sell to that is willing to commit to working with Android and who isn't likely to themselves sell it on again any time soon.

          • Re: ouch! (Score:5, Insightful)

            by DuckDodgers (541817) <`keeper_of_the_wolf' `at' `yahoo.com'> on Wednesday January 29, 2014 @09:00PM (#46105973)
            I could have sworn I read somewhere that the CEO of Motorola had been threatening to use Motorola's patent portfolio to sue other manufacturers selling Android devices. So supposedly the top reason Google bought them was to prevent them from adding a Motorola Android Tax on top of the Microsoft Android Tax and Apple Android Tax.

            Conversely, the biggest problem with the purchase for Google is that it could make the other Android device manufacturers nervous that Google would give Motorola preferential treatment. In turn, they might contemplate a jump to Windows Phone, Samsung's Tizen, or the Chinese fork of Android called Aliyun.

            So to me, what Google did here may have been expensive, but I can see the logic behind it. They stop Motorola from extorting the other Android device makers. They move Motorola's devices from 'suck' to 'decent'. They strengthen their own patent portfolio in the Intellectual Property Legal Wars. Then they sell off Motorola so that it's clear they won't screw the other Android vendors to strengthen the brand they own.
          • LMOL...umm no. It was not a hedge. Google's intention was to be like Apple and control the hardware. That especially angered Samsung and other Android OEMs. So they got the patents, which was one part of the purchase but failed on the hardware end, which was the other part of the purchase.
        • Depends depends. People scoffed at buying Youtube but that seems to have worked out alright. There's a (slightly breathless) but interesting take on what Nest might be for here:

          http://www.theregister.co.uk/2... [theregister.co.uk]

          ie it's about the server tech for running appliances.

      • Re:ouch! (Score:5, Insightful)

        by MrEricSir (398214) on Wednesday January 29, 2014 @06:44PM (#46104725) Homepage

        Google seems willing to pay 10B to rent companies for a while...

        They didn't "rent" anything -- they paid $10 billion for Motorola's patents. The rest wasn't worth much to them.

        • That is an interesting point. Anyone have an idea of how many patents Google was able to buy originally?

        • Re:ouch! (Score:5, Interesting)

          by bob_super (3391281) on Wednesday January 29, 2014 @07:11PM (#46105021)

          Actually, owning Moto put them in an uncomfortable situation with the other Android phone makers.
          If Google doesn't make hardware phones, there's less incentive to go fork your own android.

          So they paid 10 billions for patents, give Moto to someone who can both invest in it and leverage the Chinese market, and avoid a war with their customers.

          Decent deal.

          • by icebike (68054)

            and avoid a war with their customers.

            Exactly. Nail hit squarely on the head.

            Samsung leaked a Tizen phone [digitaltrends.com] just to get Google's attention.
            Google extracted a patent deal in exchange [techcrunch.com] for getting out of the hardware deal, and now they complete their end of the bargain.

            • by AmiMoJo (196126) *

              Except that the reason Google wanted the patents was to protect Android and Android device manufacturers from patent litigation, and to fight back against it where possible. Samsung wanted the benefit of that protection so did the deal with Google to cement it.

              Leaking plans for a single phone powered by another OS that is only just staring out in China isn't exactly making Google quake in it's boots.

              • by icebike (68054)

                Agreed, the patents are important. Both to Google and Samsung.

                As for Tizen only starting in China, Samsung has yet to confirm that, but If I were Google, and the single biggest handset manufacturer in the world showed a breakaway device, I'd take notice, If anyone could pull it off, Samsung could.

                Its all guesswork of course. But if Tizen suddenly takes a few more years to appear, ore quietly dies, I would not be very surprised.

        • They didn't "rent" anything -- they paid $10 billion for Motorola's patents.

          Actually, other reporting [chinadaily.com.cn] on the issue suggests that over 10,000 out of the 17,000 or so patents are part of the deal too. Larry Page said in his post that they'll be "retaining" the "vast majority" of the patents, but I'm seeing it suggested elsewhere that that may be intended to mean "retaining a license to", rather than "retaining ownership of". Alternatively, maybe it's Google getting the lion's share of the patents, with Lenovo taking the smaller portion and the reporting being a bit off. Either way, i

        • Re:ouch! (Score:5, Informative)

          by swillden (191260) <shawn-ds@willden.org> on Wednesday January 29, 2014 @07:51PM (#46105369) Homepage Journal

          Google seems willing to pay 10B to rent companies for a while...

          They didn't "rent" anything -- they paid $10 billion for Motorola's patents. The rest wasn't worth much to them.

          According to this Google+ post [google.com], it wasn't that bad. Motorola came to Google with $5.6B in cash and deferred tax assets, plus Google recovered some more of their money by selling the set-top box business ($2.35) and some factories ($75M), and finally the sale price to Lenovo ($2.91B).

          So the net cost was about $1.56B. For that Google got most of the Motorola patents and Motorola's advanced products group. Good deal? Bad deal? You decide.

      • by Ash Vince (602485) *

        Google seems willing to pay 10B to rent companies for a while...

        No, they paid $10 billion for most of motorola's patents. If you read the full article you would know that they are not selling them on to Lenovo with the rest of the company. That is still expensive based on how much everyone else paid for the Rockstar patents though: http://en.wikipedia.org/wiki/R... [wikipedia.org]

      • by mcgrew (92797) *

        You guys aren't getting it. Google only sold the phone division of Motorola. They keep the engineers and patents that came with the deal, and are licensing those patents to Lenovo. They only bought Motorola to have a MAD patent portfolio.

        They bought a company for the part they wanted and sold the parts they didn't want.

    • Re:ouch! (Score:5, Informative)

      by AuMatar (183847) on Wednesday January 29, 2014 @07:44PM (#46105327)

      Not really. They sold various other parts in the past for cash, and got tax writeoffs. Forbes estimates it only really cost them 1.5 billion in cash. With this deal they made money, and likely kept the patents.

      http://www.forbes.com/sites/ti... [forbes.com]

      • by symbolset (646467) *
        This is what I was going to say. No doubt Google will keep the tax benefits somehow. Lenovo doesn't need them.
    • by icebike (68054)

      That's gonna leave a mark. A -$10 billion mark!

      captcha: failure

      Maybe not. According to Forbes [forbes.com] Google's net cost might have been as low as $1.5 billion, which means this might be a net gain.
      TLDR: The sold off portions and the tax write-down may have made the out of pocket costs only 1.5B.

    • by shentino (1139071)

      They're keeping the patents though.

    • by msauve (701917)
      Google: "Sell at a loss, make it up on volume!"
    • LMOL...everyone said that was a mistake. I guess Google finally listened to Samsung.
  • by Anonymous Coward

    That didn't take long...I wonder what Lenovo's plans are?

  • by Red Herring (47817) on Wednesday January 29, 2014 @06:46PM (#46104759)

    Considering the $4.5B that the Rockstar group paid for ~4000 mobile-related patents, and that Google is keeping the "Vast Majority" of the Motorola patents, the bulk of the price difference may well be in the IP.

    A quick google didn't quickly give me a number for how many patents Google is keeping, but if Lenovo is getting about 2000 patents, and that is not the "Vast Majority", then there are a LOT of patents.

    I gotta get me some more patents.

    • by jonwil (467024) on Wednesday January 29, 2014 @06:56PM (#46104891)

      Given that Motorola (through the StarTac, DynaTac and MicroTac litterally INVENTED the mobile phone as we know it today, it makes sense that they would have a big patent portfolio.

      • But Qualcomm has the key CDMA patents used for all digital phones (both IS-95 and GSM UMTS) and they're newer.

    • I gotta get me some more patents.

      If Thomas Edison were alive today, he wouldn't actually "invent" or "make" anything. He'd just write up and file patents.

      A pile of patents worth $10 billion?

      Yo.

    • by evilviper (135110)

      A quick google didn't quickly give me a number for how many patents Google is keeping,

      My head asplode.

    • The original Motorola deal included 17,000 patents. Google says it's retaining the vast majority, but China Daily is reporting [chinadaily.com.cn] that Lenovo will be receiving 10,000 of them, suggesting that Google is merely retaining a license to those patents, rather than retaining ownership of them. If so, then that would limit their ability to use those 10,000 patents quite a bit.

      • by non0score (890022)
        Or if you read another site [readwrite.com], they say Lenovo is getting 2000 patents and cross licensing the rest. I think this is a lot more consistent with the public statements from the horse's mouth, in addition to the higher trust I have for native sources.
    • by ndogg (158021)

      A quick google...

      I see what you did there.

  • by SuperKendall (25149) on Wednesday January 29, 2014 @06:47PM (#46104761)

    As much as they might say they are still building hardware - obviously not to the same degree.

    Instead Google is focusing on making other hardware makers produce better Android devices, the evidence of which is the smack-down Google gave Samsung at CES [recode.net].

    • the smack-down Google gave Samsung at CES.

      I'm not sure there's enough information yet to know it was a smack-down. If part of the agreement was that Google has to sell Motorola, that would be quite a concession. And of course it may be that the agreement is for Google to adopt some or all of Samsung's UX design into Android. That would result in them shipping a standard Android distribution in future, without them actually changing anything.

    • by PRMan (959735)
      I prefer most of the Samsung apps to the Google ones.
  • First they overpay for Motorola Mobility. Now they're overpaying for Nest. Is Eric Schmidt still available to provide "adult supervision"?

    At least this will even out their recent cash flow: $3.2B out for Nest, $2.9B in for Motorola. Well, almost - they're still down by a mere $300M.

  • WTF (Score:2, Funny)

    by cfulton (543949)
    WTF that makes no sense. A 10 billion dollar loss on a company they really just purchased. And they are moving aggressively into the hardware space on all other fronts. Google seems to be a churn and burn company. If it isn't paying off right now they close it or sell it.
  • by jmcbain (1233044) on Wednesday January 29, 2014 @06:50PM (#46104803)
    Motorola has a distinguished history as a great American company. It was founded in 1928 and outlasted all its electronics contemporaries from that era, including RCA and Dumont. It had a great hit in the Razr (the iPhone before the iPhone). Now Google has sold Motorola to China.
    • by adolf (21054) <flodadolf@gmail.com> on Wednesday January 29, 2014 @07:02PM (#46104935) Journal

      Motorola has a distinguished history as a great American company. It was founded in 1928 and outlasted all its electronics contemporaries from that era, including RCA and Dumont. It had a great hit in the Razr (the iPhone before the iPhone). Now Google has sold Motorola to China.

      Nope.

      Motorola Solutions is still based in the Illinois, making top-tier wireless communications gear for commercial and public safety sectors.

      All that has been sold to China is what used to be the Crappy Consumer Products/Race to the Bottom division of Motorola:

    • Motorola has a distinguished history as a great American company.

      If Motorola Mobility had a distinguished history of consistent profits, they would have never sold out to Google in the first place.

  • Silicon Valley sure knows how to rake in the cash hand over fist, but has absolutely no clue what to do with it once they have it.

  • by jonabbey (2498) <jonabbey@ganymeta.org> on Wednesday January 29, 2014 @06:52PM (#46104843) Homepage

    Well, that nicely explains why Samsung announced that they were willing to work more closely with Google to make Samsung phones cohere to Google's direction with Android.

  • by msobkow (48369) on Wednesday January 29, 2014 @07:11PM (#46105025) Homepage Journal

    That's a pretty big shopping spree Lenovo has been on. I sure hope it pays off for them -- I like their hardware, despite all the naysayers out there, I've never had problems with their stuff yet.

  • Yuck (Score:2, Funny)

    by kaatochacha (651922)

    Well, I guess that whole "built in USA" thing on the MotoX was a fluke.
    and here I actually had a positive feeling about Google for a bit. Oh well.

  • by javelinco (652113) on Wednesday January 29, 2014 @07:13PM (#46105045) Journal
    This was always the point of the purchase. Google needed those patents to defend themselves. They bought the company to get the patents, and now that they've decided which ones matter, they are passing along the rest of the company to someone who cares. They got what they wanted, paid the price they felt was worth it, and are now happily sitting with patents that they can use to counter attacks by other patent holders in the smart phone market. I believe there was intense speculation about this being the motive when we first discussed this purchase on Slashdot.
    • by oodaloop (1229816)
      Agree. I don't know why there's so many posts here saying this is stupid. I think it's well-thought out plan.
  • by jareth-0205 (525594) on Wednesday January 29, 2014 @07:16PM (#46105071) Homepage

    Gotta say this is probably a better state for Android to be in from a "standard platform" point of view, a company making hardware and licencing its software to other hardware manufacturers hasn't work out very well in computing in the past. Either own the lot (Apple) or provide yourself as a service but don't compete (Microsoft pre-Surface). If you compete and licence, you end up being Apple during the clone years, or Palm. Companies might take a free ride on a crocodile, but they'll get off when they can cause it's not very safe...

    Lenovo has done a decent job with Thinkpad, so it's not entirely doom for Moto either.

    • by swillden (191260)

      I always suspected that Google would divest itself of Motorola, mostly for the reason you mention. In addition, I noticed that Google was operating Motorola as a completely separate business, not merging them with the rest of the company at all. That might have been to help maintain an arms' length distance to reassure other handset manufacturers, but I think it was mostly because they knew this day was coming. They just had to get Motorola back on track as a phone maker so they could sell it for a reasonab

  • by LostInTaiwan (837924) on Wednesday January 29, 2014 @07:20PM (#46105105)

    Lenovo again? First you took my Thinkpad now my Moto X.

    I guess the "Don't be Evil" Google is long dead. The principled stand of exiting from the Chinese market, followed by assembling the Moto X in the US, then selling Motorola to Lenovo? ? ? WTF, Google.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Troll much?

      Lenovo has ALWAYS made the Thinkpad, even when it was called the IBM Thinkpad.

  • Soon you're talking real money.
  • I thought the very purchase of Motorola Mobility was the patent trove. It would protect Android from attacks by Apple and the like.

    So I wonder why they're selling to Lenovo now. It's kind of odd when you come right down to it.
  • I thought they were barely profitable. They must be scraping money together somehow.
  • The ink is barely dry on the acquisition of IBM's x86 server business for about $2.3 billion and now the purchase of Motorola for $2.91 billion. These could be genius longsighted moves but to me it seems that Lenovo is in danger of trying to expand too quickly.
  • by michaelmalak (91262) <michael@michaelmalak.com> on Wednesday January 29, 2014 @09:27PM (#46106239) Homepage
    They need the extra cash to pay Lycos for AdWords royalties.
  • Google's main priority is the Android ecosystem. One attractive property of Android is the level-playing field (or at least one that is only reasonably bumpy rather than mountainous). Google's ownership of Mobility gave it patents that will probably be useful, and of course they aren't letting go of those, so what is sold is not what is bought. Google's ownership of one player can at least give the impression that Google will favour its own, or at least will tend to under commercial pressure. Letting M

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