
Google Buys Motorola For $12.5 Billion - iamben
http://techcrunch.com/2011/08/15/breaking-google-buys-motorola-for-12-5-billion/
======
51Cards
If there is one company I trust to not screw this up it's Google and I think
they have a good shot at getting this right. I'm sure their partner companies
are going to be a bit ansy to start but they all compete on hardware / price
anyhow which this doesn't change. A few points that pop to mind:

A. They already had to compete with Motorola, so they haven't lost or gained a
new competitor.

B. They don't pay for Android so Motorola hasn't gotten some new financial
edge. Google just has to ensure that all companies still get source releases
at the same time. What they do with them is up to them. (aside: I expect we
will see MotoBlur disappear with some of its key features rolled into future
Android releases)

C. This will allow Google to protect Android much better which is very
beneficial to their bottom lines, especially if it keeps patent licensing
costs off of their products.

D. Google just has to be sure they don't play favorites but from what I have
seen up until now they have been good about that.

E. This may have just brought the competition for who gets to build the next
Nexus to an end. (unless the next Nexus is already basically "done" at another
partner company)

I think they can get this right... and now hopefully we can get a whole line
of nice Motorola hardware with current Android and unlocked boot-loaders, etc.
I might have to reconsider the Droid 3 again (more like Droid 4 one day, since
3 is already in the wild as is)

~~~
dlikhten
To add:

a) there will be at least 1 company focused on android which will be protected
with the cloth that is Google's legal team.

b) Google can make Motorola better

c) Google can make hardware to go with their software.

d) Google can finally make Motorola phones running android open.

e) We can finally see what it means for a hardware company to exist with a
motto: "Don't be Evil". Sure Google is not perfect, but all other companies
have the motto: "Money first, morals second."

f) Google can make an incredible experience which would become the de-facto
standard for Android phones. Finally killing off HTC sense.

~~~
intended
GOOG is a s/w company and not a manufacturer. The ability to integrate both
sides of such different firms is very difficult. This puts both points b), c)
and e) off the table.

Point f)? I'm not sure, but I really hope that they can do something while
looking at exactly how it will play out on a phone. They did try this with the
Nexus though, and that was not something which worked out perfectly imho.

M&A's have a tendency to be non-accretive to the purchaser. This looks like
its going to be similar for Google.

~~~
SkyMarshal
>GOOG is a s/w company and not a manufacturer.

Fanboys used to say the same thing about MS when they were working on the
first Xbox, and they came out looking pretty silly for it. The first one was a
bit clunky, but the second one, especially with Kinect, is gangbusters.

Integrating Motorola won't be as big a problem as you make it out for a
company as smart and well funded Google.

~~~
mrj
I'm not sure that's the example I'd use. They sunk billions in the first on
for little to show for it. Billions fixing broken xboxes in the second one and
only recently have begun to gather some steam -- and even then it was helped
by Sony's numerous missteps.

~~~
achompas
"Only recently?" If not for the $1B RROD write-down in 2008, Microsoft would
have been profitable then. MS has been making money off Xbox ever since that
writedown.

~~~
ZeroGravitas
Got a cite for that? I think I saw estimates that the XBox project was still
5-10 Billion in the red at that point. Have they been making profits to even
cover the interest they could have earned with that size of investment by
leaving it in something low risk?

~~~
achompas
No cite for my specific claim, but I found this Engadget article claiming MS's
Entertainment & Devices Division (read: Xbox) was $80 million in the black in
2008:

[http://www.engadget.com/2008/01/24/xbox-goes-profitable-
almo...](http://www.engadget.com/2008/01/24/xbox-goes-profitable-almost-like-
a-grown-up-business/)

Note that I got the write-down year wrong--it was 2007.

~~~
bostonvaulter2
Isn't that just profit for that year, not including all of the sunk costs to
get started?

~~~
achompas
Are we looking at cumulative Xbox profits from day one? Generally one is
interested in a division's ability to generate positive cash flow, no matter
the initial cost, because it's assumed that division will generate said cash
flow in perpetuity.

------
ErrantX
Only part of Motorola, and not generally the part considered the "original".
:)

Motorola mobility was spun off of the main company in January - I think at the
time there was commentary on the stock markets that it was done with the aim
to get someone to buy it.

So Motorola will exist still - as Motorola Solutions (it is the bigger & more
profitable part of the company anyway) and Google get a phone manufacture
division under their control.

Interesting move.

~~~
hammock
They did it for the patents. Larry Page: _"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."_

Seems like the best jobs at Google will soon be the lawyers, not the
engineers.

~~~
sunchild
Many patent lawyers are engineers.

~~~
hammock
Most of them come from an engineering background (at least education), you're
right.

It's fascinating to me to see this shift, which Google seems to be leading,
from tech companies fighting over new product development - and spending gobs
of cash on it - to something entirely different: fighting over patents (and
again, spending gobs of cash on it). Where a company spends its cash is a good
measure of where its priorities are, and I'm not sure what that says about
Google.

~~~
18pfsmt
_"It's fascinating to me to see this shift, which Google seems to be leading,
from tech companies fighting over new product development...to something
entirely different: fighting over patents "_

I thought it was Microsoft and Apple that were aggressively filing patent
lawsuits, and Google and other Android partners were on the receiving end, no?

One other thing I don't see being mentioned anywhere in these threads is that,
"Motorola Mobility held $5.5B in cash and deferred tax assets; this could put
Google's (GOOG) real purchase price around $7B."[1]

[1][http://seekingalpha.com/article/278932-can-motorola-
mobility...](http://seekingalpha.com/article/278932-can-motorola-mobility-be-
sustainably-profitable)

------
amirmc
Larry Page via the google blog:
[http://googleblog.blogspot.com/2011/08/supercharging-
android...](http://googleblog.blogspot.com/2011/08/supercharging-android-
google-to-acquire.html)

 _"Motorola’s total commitment to Android in mobile devices is one of many
reasons that there is a natural fit between our two companies. Together, we
will create amazing user experiences that supercharge the entire Android
ecosystem for the benefit of consumers, partners and developers everywhere"_

and

 _"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."_

------
51Cards
One further thought on the patent portfolio. Don't forget that Motorola is
widely considered to have "invented" the first practical cell phone. Their
patent portfolio isn't just going to be stuff like "Using shades of gray in a
UI". It's going to run deep into what constitutes a mobile device.

~~~
bryanlarsen
Those patents would have been issued in the 70s and long since expired. Even
the first generation digital cell phone patents should be mostly expired. I'm
not sure how involved Motorola was in the consortiums that developed the
2G/3G/4G standards, but my impression was that they were dominated by the
chipset vendors (Qualcomm etc) and the telecom guys (Nortel etc).

Of course, there were competing standards, and who primed which varies, but I
don't think Motorola primed any of them.

~~~
BvS
When exactly do those kind of patents expire?

~~~
ahlatimer
20 years after filing date, IIRC.

------
Jabbles
Keeping Android open whilst treating their own phone manufacturing fairly will
be a big challenge for Google. I hope they manage it. If done correctly the
result should be a improvement in Android for all manufacturers, as the
internal demands of Motorola will want to be heard, but cannot be prioritised.

I am still puzzled as to how Skype cost $8billion.

FYI Motorola Mobility had 24,500 patents when it was launched.
[http://mediacenter.motorola.com/Press-Releases/Motorola-
Mobi...](http://mediacenter.motorola.com/Press-Releases/Motorola-Mobility-
Launches-as-Independent-Company-352b.aspx)

~~~
cincinnatus
If they have any sense they are already negotiating the sale of the physical
business on to someone else. Keep the patent portfolio and recuop $6 billion
of the initial outlay.

Also, "open" in name only.

~~~
rbanffy
> Also, "open" in name only.

"open" as in:

    
    
      $ repo init -u git://android.git.kernel.org/platform/manifest.git

~~~
krakensden
unless you want the latest version...

~~~
runjake
I'm not sure why krakensden is being downvoted for their comment.

This is a continual gripe in the Android developer/hacker community. Has all
of the Android 3.0/3.2 source finally been posted to android.git.kernel.org?
Ice Cream Sandwich?

~~~
mindcrime
_I'm not sure why krakensden is being downvoted for their comment._

Maybe because Google have been pretty emphatic about the fact that the
Honeycomb / Ice Cream Sandwich code will be released, and because their delay
in releasing this one specific revision is hardly the same thing as "closing
Android" or whatever hyperbole is being floated around.

That said, I didn't downvote him. I didn't think the comment added much to the
conversation, but it's not worth a downvote in my eyes.

~~~
runjake
I'm not sure I see the point of opening an Android release after it's
developed. It defeats a primary benefit of open source software. And even
then, on most models (HTC, Motorola), unless I'm willing to violate my
warranty and root it or unlock the bootloader, I'm not able to actually use
the source.

This whole "Android is open!" thing seems largely for marketing, not to
actually promote any openness (unless you buy a Nexus phone, which is what I
own, FWIW)

~~~
mindcrime
_I'm not sure I see the point of opening an Android release after it's
developed. It defeats a primary benefit of open source software._

Well, having the code released at all, is always better than not having it.
The more code released to the world under a reasonable F/OSS license, the
better, as far as I'm concerned. That said, you make a good point... Android
isn't necessarily developed in the most open of fashions, despite the fact
that the source itself is, technically, open source. :-(

 _And even then, on most models (HTC, Motorola), unless I'm willing to violate
my warranty and root it or unlock the bootloader, I'm not able to actually use
the source._

Nonetheless, you do have that choice. That's a fundamentally different
scenario than with, say, a win7 phone or whatever, where you don't have access
to the source at all. Plenty of people are willing to take the chance with the
warranty situation in order to load custom versions of Android, so clearly
this matters to some people.

------
latch
63% premium...insanity. This is all about patents, isn't it?

Instead of spending $4billion for patents, spend 3x as much, get a huge
portfolio (I don't know how large, but it's supposedly quite large)..and a
part of a company as well.

~~~
chollida1
I'd say this was probably plan b, for if their previous patent purchase didn't
happen.

The problem with Google, or any software company buying a hardware company is
that generally the street values hardware at a lower multiple so this has the
chance to pull down google's market cap.

We'll see how the market reacts to this during today's trading.

~~~
nknight
Was it plan B? Major purchases like this don't usually happen quickly. The
Nortel and Novell stuff all went down in the last six months, and neither
(separately or together) would have cost Google enough to make them back off
an in-progress attempt to buy Motorola.

This could have been part of a Google patent blitz from the start.

~~~
irons
When you show up willing to pay a 63% premium, it doesn't take six months.

~~~
nknight
Well, it's a 63% premium over Friday's close, but it's a nice even $40/share.
Which one seems to be by design?

Notably, MMI peaked at $36.34 in January. I could see MMI's board thinking it
was worth close to $40, given the crappy/insane state of the market.

------
joebadmo
To make a broad point without going into details about patent quality:

Nortel: $4.5B / 6,000 patents = $750k per patent.

Motorola: $12.5B / 14,300 patents = $856,164.38 per patent.

Plus 6,700 patents pending.

Plus a hardware company.

There are obviously a lot of other factors, but it seems like a pretty good
deal, and maybe a smarter way for Google to go about acquiring patents without
having to deal with bidding wars with consortia of their competitors.

Either way, it seems the lawyers are winning. Everywhere.

~~~
justin_hancock
The other critical factor is whether the acquisition is a cash deal or a share
based deal, a share arrangement would be very efficient indeed, hard to find
meaningful details of the acquisition.

------
RuadhanMc
It's fascinating to see the behemoths (Apple, Microsoft, Google) positioning
themselves for the fight ahead. The importance of this fight cannot be
understated.

Microsoft won the last fight like this and they have dominated our desktops
for 15 years (OK, maybe not all HN devotees) and pocketed gazillions.

Apple are ahead right now (manufacturing handsets, selling software, etc),
Google are second and Microsoft are lagging behind in third, but this Motorola
deal means that Google might be able to pull ahead of Apple for a period and
alienated phone manufacturers who are using Android might flock to Microsoft,
inflating their sails a little.

~~~
w1ntermute
> Apple are ahead right now (manufacturing handsets, selling software, etc)

Uhh, haven't more Android handsets been sold per day than iOS handsets for
like the last 6 months?

~~~
RuadhanMc
Perhaps, but Apple make a ton more money per handset than Google does, so in
my mind they are ahead. They also continue to lead design-wise. Manufacturers
are still copying Apple products in this space.

~~~
w1ntermute
Google doesn't (directly) make any money off of any Android handset, so I'd
say that's very difficult to assess without knowledge and analysis of the
impact Android has had on AdSense revenue, not to mention this money is a
continuous stream of revenue following the purchase of an Android phone as
opposed to a one-time up-front fee.

~~~
MrScruff
I'm not sure why Google would make much more in Adsense revenue on Android
than they would on iOS. I think the primary issue is not conceding control of
the platform their revenue is reliant on to a competitor.

~~~
rbanffy
> I'm not sure why Google would make much more in Adsense revenue on Android
> than they would on iOS

Aren't iPhone app developers using iAd?

~~~
alex_c
iPhone app developers tend to use a variety of ad networks, based on whatever
pays best. iAds usually has the best CPM, but inventory can be limited - and
the fallback is usually AdSense (or... AdMob, which is also Google).

------
kylec
Interestingly, this means the only manufacturer-neutral smartphone OS is now
Windows Phone 7. iOS is on Apple, Android is on Motorola/Google, Blackberry on
RIM, and webOS on HP/Palm. I wonder if this means we'll see an increase in
WP7-based phones from HTC, Samsung, and LG...

~~~
haasted
Isn't it questionable whether WP7 will be manufacturer-neutral? The level of
cooperation between Nokia and Microsoft remains to be seen, but a possible
outcome is that Nokia ends up looking like a subsidiary of Microsoft.

~~~
qeorge
True, and if RIM keeps dropping I wouldn't be surprised to see MS acquire
them.

~~~
jfruh
How would this fit in with a Nokia-WP7 Special Relationship though? Would MS
kill off old and new BlackBerry OSes and just use RIM's old sales contacts to
sell more WP7 phones or what?

~~~
qeorge
That's a great question. I would expect MS to maintain the BlackBerry brand,
which I think still has some clout in the enterprise. That and MS/RIM have a
somewhat long-standing relationship too. As I understand it, BlackBerry is the
only way to get end-to-end encryption from an Exchange server to a smartphone,
although I'd be surprised if that's not added to WP7.

But basically, I think RIM is screwing up so much that they'll be an
acquisition target soon, and MS seems like the most likely buyer to me.

~~~
hollerith
>I would expect MS to maintain the BlackBerry brand, which I think still has
some clout in the enterprise.

Does MS really need a brand with enterprise clout though? Doesn't the MS brand
itself have enough enterprise clout?

~~~
Kadrith
I think the MS brand has more clout than RIM; if for no other reason than most
large companies will have a relationship with MS for other products. In all of
the large companies I've worked at buying from an existing vendor was
preferable if the products were roughly comparable.

------
gahahaha
I always wonder: Wouldn't it be much cheaper to just spend a few billions to
buy some new patent legislation from congress?

~~~
yuvipanda
Wouldn't that be countered with several more billions from basically everyone
else opposing it (wouldn't be just tech firms)?

------
billybob
One interesting side note: Sprint/Nextel has always heavily relied on Motorola
phones, and a few months back, Sprint and Google rolled out tight integration
between Sprint service and Google Voice
([http://googlevoiceblog.blogspot.com/2011/03/sprint-
integrate...](http://googlevoiceblog.blogspot.com/2011/03/sprint-integrates-
google-voice.html))

So now I'm wondering 1) Was Spring anticipating this merger, and 2) will
Google's purchase of Motorola be a boon for Sprint?

I'm not a Sprint customer, but in the name of keeping more competitors in the
mobile market, I do want to see them stay in the game.

------
alf
Official announcement from Google, written by Larry Page:
[http://googleblog.blogspot.com/2011/08/supercharging-
android...](http://googleblog.blogspot.com/2011/08/supercharging-android-
google-to-acquire.html)

He mentions patents specifically as one of the reasons for the acquisition.

"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."

------
iamben
From Reuters a few weeks back:

[http://uk.reuters.com/article/2011/07/21/us-motorola-
idUKTRE...](http://uk.reuters.com/article/2011/07/21/us-motorola-
idUKTRE76K54220110721)

"Billionaire investor Carl Icahn urged Motorola to shop around its patent
portfolio to cash in on interest in wireless technology from companies like
Google Inc and Apple Inc."

~~~
iam
Later down there's a whole section titled "OPPORTUNITY FOR GOOGLE?"

Would've been nice to see that news a few weeks ago, then today's acquisition
wouldn't have been so out of the blue.

------
haasted
This is probably going to make some of the other handset manufacturers (HTC,
Sony-Ericsson, etc) complain about Motorola having an unfair advantage when it
comes to implementing Android.

Wonder if any of them are about to regret basing their smartphone offerings on
Android? The move ought to strengthen the competition among the handsets,
though, as Google can now ship their "dream-version" of an Android-phone.

~~~
51Cards
Apparently these are their early comments. Of course how much thought has gone
into these yet is another question.

<http://www.google.com/press/motorola/quotes/>

~~~
sequoia
This was really funny; couldn't they've at least tried to make it look like
the quotes weren't all written by one person?

    
    
        q1v1: We welcome today’s news,                    which demonstrates Google’s deep commitment        to defending Android, its partners, and the        ecosystem.
        q1v2: We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.
    
        q2v1: I  welcome Google‘s commitment to defending Android and its partners.
        q2v2: We welcome Google‘s commitment to defending Android and its partners.

~~~
51Cards
I think what you're seeing is not written by the same person, (Google couldn't
be caught impersonating the owners of their partner companies) but probably a
set of statements written by PR assistants all on the same "Please give us a
statement on..." request using the same source terms out of the press release.
All of them are toeing the corporate partner line for now.

------
ThomPete
If this is purely a patent hunt then fine.

If Google hope to get better vertical integration it's my guess they are in
for a surprise.

On the surface these acquisitions always sound like they are a good idea.
Combine X strenght with Y strenght.

In reality you have two very strong cultures that have to work together.
That's simply not going to happen.

Vertical integration is not just a question of having the skill all the way
down to manufacturing. It's even more about being able to carry a design
vision all the way trough.

Anyone who worked in or with a large organization know how plausible that is.

~~~
da_dude4242
Not sure they are seeking vertical integration at least not at the expense of
the horizontal span that has expanded the android ecosystem beyond iOS.

------
bryanlarsen
What's the worst case scenario vis-a-vis Android openness and competitiveness?

Google can't take back the code it's already released other than the non-open
source apps like Google Mail. But it can stop releasing new code. HTC et al
are making too much money from Android, I doubt they'd stop investing in the
platform, resulting in slow platform divergence a la Unix in the 80s and 90s.

3.2 hasn't been fully released to the open source community, but HTC and all
the important players have it already, and I doubt that their license allows
Google to yank it unilaterally.

Google does have to keep releasing code it based on GPL'd work, primarily the
kernel, but that's a very small portion of the Android IP.

The first litmus test will be the release of Honeycomb.

Best case scenario? To me, that would involve Google moving towards a more
open development model similar to what virtually all other successful open
source projects employ.

They will be forced to make moves to placate HTC and all of their other
partners, but whether those moves benefit us is the question.

~~~
antrix
> The first litmus test will be the release of Honeycomb.

You mean Ice Cream Sandwich? Google has made it clear that they won't be
making a Honeycomb source drop. Instead, ICS would contain the 'converged'
codebase from their phone (Gingerbread) and tablet (Honeycomb) trees.

~~~
zacharypinter
If we want to get ultra-technical, releasing the git sources of Ice Cream
Sandwich will pretty much require releasing the Honeycomb source as a
prerequisite. However, there's not much point of basing your work off of
Honeycomb over Ice Cream Sandwich at that point.

------
jeffool
I'm of the mindset that this is chiefly for the patents... But.

The real benefactors of this? The former Danger team that made the TMobile
Sidekick, one of whom created Android.

If you recall, shortly after the last I/O the gang was announced reunited at
Google working on a plethora of hardware toys. I think Google just bought them
a new playground to play in.

------
justin_hancock
Does this include any of the H264 patents that Motorola hold? If so this makes
this story even more interesting, the cases for WebM/VP8 would change
substantially.

~~~
andybak
On one hand:
[http://www.mpegla.com/Lists/MPEG%20LA%20News%20List/Attachme...](http://www.mpegla.com/Lists/MPEG%20LA%20News%20List/Attachments/137/n_03-07-07_avc.html)

"Parties with patents or patent applications determined by MPEG LA’s patent
experts to be essential to the H.264/AVC standard (“standard”) so far include
Columbia University, Electronics and Telecommunications Research Institute of
Korea (ETRI), France Télécom, Fujitsu, Matsushita, Mitsubishi, Microsoft,
Motorola, Nokia, Philips, Polycom, Robert Bosch GmbH, Samsung, Sharp, Sony,
Thomson, Toshiba, and Victor Company of Japan (JVC)."

On the other - I don't see Motorola here:
<http://www.mpegla.com/main/programs/AVC/Pages/Licensors.aspx>

So I'm a bit confused about whether Google just managed to buy into AVC/h264
or not.

~~~
justin_hancock
The problem is knowing which part of Motorola held the patents, if it was
mobility, which would seem logical in some ways (encryption of video streams
and media) it would be a boon. Microsoft have a big case against Motorola over
the license fees for h264.

Plus I assume there's the iDEN patents, which I suspect will have lots in the
download/media area. It will certainly keep the wolves from the door.

My big hope is that Google do something altruistic with this, however it's
shareholders may have other ideas.

------
jahmed
At first this made absolutely no sense to me. Totally random borderline crazy,
reasonable for defense but a huge risk. Why would Google buy a low margin
phone builder thats struggling to make money, its just not reasonable unless
they dont want to make money on phones.

Google isnt about the sky its about the floor. Yeah Google does all sort of
crazy crap with self driving cars and wind energy but the real focus has
always been raising the base. Look at Chrome and Android raising our
expectations for speed, usability, security and cost. Google doesnt want Moto
to build the Android iPhone, Google wants an Android Razr. The Android Razr
would be a rugged dirt cheap smartphone. A new base level 'free' phone that
out classes any feature phone. Its in Google's best interest to get a
smartphone into the hands of every single person on the planet. How many
Google searches can you do on a free AT&T Samsung Rugby® II, probably not that
many. Its not a bad move and if executed well this could mark a huge push for
the internet and personal communication devices.

------
presty
Just speculating:

Could this be a genius move?

I don't know how good MM's patent portfolio is but not only they get lots of
ammo for the patent war, they also get their own phone manufacturer.

And MM seems to in more than just phones, could they lead the way for the
future of Android, namely Android@Home and Android Open Accessory?

~~~
ConstantineXVI
Don't forget MotoMobile also got Moto's cable box business. Think of every new
Comcast, TWC, etc. subscriber suddenly having a Google TV box by default;
which is fully integrated with their cable system. Apple and Roku's boxes
wouldn't stand a chance.

~~~
evilduck
I'm not so sure about that. AppleTV and Roku boxes don't rely on a
ridiculously expensive monthly subscriptions to be useful. The only damage to
sales would be the people who would have bought an AppleTV/Roku box _and_
retain their cable subscription.

A year's subscription to Netflix and a Roku or AppleTV are each just a little
more expensive than a month of cable subscription, saving you a little less
than 10 months of cable subscription fees. Google would have to add around
$700/year worth of value to all these set top boxes to compete with that (not
to mention having to play nice with the various cable companies and such).

------
blinkingled
This is obviously great news for both Google and Motorola. I am glad they did
not let the not buying Sun mistake repeat.

I have no idea what Sprint is worth but Google buying or investing in Sprint
might take this to yet another level! And Larry had shown he isn't shy of
adventures.

Still remains to be seen, how this impacts other manufacturers' support of
Android. Could be WP7's gain. EDIT:
<http://www.google.com/press/motorola/quotes/> \- Many including Sony
Ericsson, LG and HTC have responded favorably.

------
heydenberk
In case there's any doubt this is about "defending Android", head over to
<http://www.google.com/press/motorola/quotes/> . Each of the four statements
from an executive at a major device manufacturer users the particular phrase
"defending Android."

------
mtkd
... or Google takes a gun to the knife fight on patents -
[http://www.informationweek.com/news/mobility/business/231400...](http://www.informationweek.com/news/mobility/business/231400090)

------
toddmorey
Funny how I've been anticipating Apple expanding into Google's search,
services, and map space, but I certainly never thought of Google getting into
hardware. I think it shows just how different the modern consumer space is
from the last decade of computing. Unless you believe this is entirely about
patents, Google has identified a need to give the Android ecosystem at least
one device that's been holistically designed end-to-end.

------
grovulent
The comments about this being the end of android as open source are pretty
reactionary.

C'mon folks. Remember the moat analogy? Search? MOOLA!

------
cdevroe
This title should say "Google Buys Motorola Mobility for $12.5 Billion". No?

------
Swannie
It is worth noting this is the handset manufacturing part of Motorola.

Google's first foray into consumer electronics? That's big news. Phones and
tablets. They are now competing directly in Apple's space.

Full control over the handset stack? (Did Samsung really push back that much
on newer "GooglePhone" design?) Or access to patents? It's not really clear.
However they do buy themselves a worldwide R&D facility.

------
eddieplan9
I don't get it about the patent protection thing. If Apple can sue Motorola
today despite Motorola's 17,000 patents, how could Google get any protection
with the same 17,000 patents?

------
benfwirtz
Google shares already lost 4% on the Frankfurt Stock exchange (
[http://www.boerse-
frankfurt.de/EN/index.aspx?pageID=35&I...](http://www.boerse-
frankfurt.de/EN/index.aspx?pageID=35&ISIN=US38259P5089) ), and Google didn't
answer any questions on how they came up with this extraordinary price. I
don't think $12.5bn is justifiable...

~~~
lallysingh
In terms of what they'll add to Android (patent protection for partners,
stronger steering of hardware & user experience), it'll pay for itself pretty
quickly.

------
Luyt
esr has foreseen this: _"This morning came the news that Google has agreed to
buy Motorola Mobile for $12 billion. I was half-asleep when A &D regular Jay
Maynard phoned me with a heads-up, but not surprised for a second; as I told
him, I’ve been expecting this for weeks."_

<http://esr.ibiblio.org/?p=3597>

Apparently what counts are the patents:

 _"make no mistake: this purchase is all about Motorola’s patent portfolio.
This is Google telling Apple and Microsoft and Oracle 'You want to play silly-
buggers with junk patents? Bring it on; we’ll countersue you into oblivion.'"_

esr envisions a rosy future for Android: _"now that Google has shown it’s
willing to fly cover for Android handset and tablet makers, likely there’ll be
more of them signing on. This move will accelerate Android hardware down the
price curve."_

------
drink
This is the beginning of the end for Android as an open platform. Google will
have a financial incentive to release the best phones as Motorola devices. I
would not want to be HTC today.

I like how Larry Page talks about IP in the blog post. After all of that talk
about how patents were overpriced, Google comes out and spends more money than
anyone on acquiring what is basically a terrible handset maker with a large IP
portfolio. At the end of the day, Google does what's best for Google.

~~~
RuadhanMc
Google has got to play the game until the rules of the game change. They need
patents for protection. Yes, the patents are overpriced, but does Google have
a choice?

~~~
jamesteow
And nobody has to change the rules if people play the game.

~~~
cageface
Android tablets are being pulled from shelves. What should they do? Just
concede the market to Apple for the decade or so a serious attempt at patent
reform will probably take? They're still not offensively suing anybody.

------
arkitaip
So basically Google has acquired Motorala because they want to strengthen
Android and build up a better patent portfolio. Funny how they don't mention
users, better mobile experiences, etc all that much. I'm surprised how frank
Larry Page is in his blogpost
[http://googleblog.blogspot.com/2011/08/supercharging-
android...](http://googleblog.blogspot.com/2011/08/supercharging-android-
google-to-acquire.html)

~~~
Tichy
I am not sure if Apple would ever be caught admitting that any of their
products suck. They will always sell stuff in a more positive way (I mean they
won't say "our product x sucked, this is what we do to make it better"). Why
should Google do it differently.

~~~
Caballera
Didn't Steve Jobs say Mobile Me sucked at WWDC 2011?

~~~
gtaylor
Years after the fact that it sucked became apparent.

~~~
guywithabike
What good would it do to trash MobileMe publicly before a suitable replacement
was imminent?

------
martingordon
So now Google has blessed a hardware manufacturer as the official Android
manufacturer, and despite Google's insistence that Android is open, I don't
think we've seen the Honeycomb source code yet. How long until Google no
longer offers the Android source at all?

Samsung, HTC and the others are probably not very happy about this and will
likely move them to start pushing their Windows Phone 7 handsets a bit harder
than overly relying on Android.

~~~
starwed
> _despite Google's insistence that Android is open, I don't think we've seen
> the Honeycomb source code yet_

The word "yet" is mildly disingenuous. No one is waiting for them to do that
-- google said a while ago that it wouldn't happen, but that they would
release the source to Ice Cream Sandwich.

~~~
listic
How can Google get away with not publishing GPL-derivative code from the legal
point of view?

~~~
mhw
For those parts of the system that are GPL licensed, they (or the handset
manufacturers who are distributing the compiled code) shouldn't be able to:
[http://fosspatents.blogspot.com/2011/08/most-android-
vendors...](http://fosspatents.blogspot.com/2011/08/most-android-vendors-lost-
their-linux.html)

From the article, nice list of Android tablets showing those that comply with
the GPL: <http://www.codon.org.uk/~mjg59/android_tablets/> \- a small
proportion of the list are marked compliant, but most of the big names seem to
be there.

Posted earlier, but not enough votes:
<http://news.ycombinator.com/item?id=2885787>

------
forgotAgain
It's still all about ads for Google.

With the patent war being fought by Apple and Microsoft they had no choice but
to arm themselves. Otherwise they would soon face a mobile space dominated by
the other two mobile OS vendors due to license fees that would make Android
unprofitable for hardware vendors.

Apple and Microsoft would then push Google ads out of the mobile space by
demanding a large share of ad proceeds or by pushing apps instead of HTML5.

------
bdunbar
Well, that should be interesting.

I contracted at Motorola for a half-year - systems administration.

They were very segmented, regimented and separation of duty'd. It felt like
you couldn't sneeze without having the boss's boss's boss sign off on it. And
then over to security for his chop.

I've never been to Google or to Spain but from what I've read .. the culture
mix is going to be interesting.

~~~
jdelsman
Yeah, I agree. I contract at Motorola in China, and it is extremely
regimented. The Chinese are very good at it, though. Coming from a startup
culture, I can tell you it is hard to believe the two cultures are going to
sit well with each other. There are going to have to be some changes.

I think its convenient how the software structure is already on Gerrit
(<http://code.google.com/p/gerrit/>), and we all use Google Apps for email,
etc.

------
RexRollman
You gotta think this is about the patents more than anything. But I could be
wrong.

------
kposehn
You don't spend $12.5 billion on a device maker for patents; You just buy the
damn patents. (~_~)

I actually was far more bullish on Android's prospects before given the rapid
device growth, the de facto stealing of Symbian's marketshare and the adoption
of the platform as a basic and functional OS for most users. However, as a
strategy I think this is quite flawed initially.

As a device maker, Motorola Mobility would be a good play for HTC or Samsung.
They'd be integrating an established maker with contracts, devices, patents,
etc. For the platform maker to outright buy them would immediately put most
other makers on guard.

What guarantee do you have that Google won't favor Motorola? How do you know
that they will keep things on an equal footing? You don't. Case in point:
travel comparison on AdWords. Google has shown their willingness to integrate
vertically and throw valued customers under the bus.

In the long run, it makes absolutely zero sense for Google to keep Motorola as
"just another device maker" in the Android ecosystem. They most likely will
give it lip service for a year, try and fight off some patent suits and then
slowly integrate things much more tightly. I think they're betting that they
can become another Apple in terms of integration with Android not being overly
harmed by other vendors fleeing to Microsoft. It is the logical strategy - the
one driven by reality, not some PR spin of being "open".

------
twidlit
Wow, not any of the tech blogs saw the smoke before the fire? Could be a
hardware + patents play...

~~~
Happer
"Quick and easy fix for all Android patent problems. Google should buy
Motorola" 02 Aug 11, unwiredview.com:

[http://www.unwiredview.com/2011/08/02/quick-and-easy-fix-
to-...](http://www.unwiredview.com/2011/08/02/quick-and-easy-fix-to-all-
android-patent-problems-google-should-buy-motorola/)

~~~
artaxerxes
[http://www.brianshall.com/content/motorola-mmi-reminds-
micro...](http://www.brianshall.com/content/motorola-mmi-reminds-microsoft-
and-google-they-will-need-pay-premium-acquire-them)

Correctly interpreting - if not actual tarot reading.

------
jbuchgr
I am quite confident that this deal does not bring much changes to Android and
related companies, because even tough Google bought Motorola Mobility, their
commitment to the other device manufacturers (Samsung, HTC, LG...) will be as
strong as ever. It's Google's goal to reach as many people as possible with
their Android operating system, so they can sell ads and be the
default/dominant search engine on the mobile platform.

I would even argue that, after the acquisition, they are going to take extra
good care of their relations with Samsung and HTC. Also I'm quite positive
that the executives of the before mentioned firms, who've already both been
sued by Microsoft and Apple, welcome the acquisition at least in the short
term, as it strengthens Android's position in the patent lawsuits. We must not
forget that it's Android that made HTC and Samsung great in the smartphone
business.

Androids (Google's+Motorolas) success, is HTC's, LG's and Samsung's success.

So from my point of view, all the above mentioned companies depend on each
other, which is why I don't expect any big strategic moves/changes in the next
few months/year on either side.

------
mwill
The headline threw me at first, then I started thinking about how closely they
worked with them on the Xoom, iirc they Honeycomb guys were testing and
working on the Xoom exclusively (From the Google I/O keynote I think)

I wonder if we'll see more open (i.e. easily rootable, well documented etc)
handsets coming from this deal. Not entirely sure but I think the Nexus One
was the last really transparent HTC Android device...

------
colintan
There was some mention in a statement by Google of Motorola's success with
consumer/home devices.

Any of you think there's a possibility of Motorola building on Google TV?

 __relevant article by Business Insider picking up on this point
-[http://www.businessinsider.com/motorola-doesnt-just-make-
and...](http://www.businessinsider.com/motorola-doesnt-just-make-android-it-
can-also-make-google-tv-2011-8)

------
davidedicillo
I wonder if Google will start giving away for free phones with ads, truly
disrupting the market like they did with everything else.

------
bryanlarsen
I also wonder if this will affect Google's choice of launch partner for Ice
Cream Sandwich (4.0). Current rumours have that either being Samsung or that
there are multiple partners. It'd be too late to back down on a Samsung
choice, but if there were multiple partners...

------
fpgeek
And, sadly, another voice for patent reform is muted...

~~~
_fn
The patent reform they are fighting for will take years if not decades. This
is a good short term move, they can't just sit and watch the Apple/Microsoft
patent attack.

~~~
fpgeek
As long as they don't get corrupted by their new hoard along the way...

------
cft
Dropbox valuation is nearly as much as Moto mobility. I wonder if you hand
those kids that started Dropbox a bunch of chips, whether they would make a
Droid handset? Are these enterprises the same level of complexity and know-
how? There is no bubble...

------
jsz0
The thing I don't understand about this deal is if the patents are as valuable
as Google claims why did they only pay (effectively) $9B for them? Motorola
hasn't really been on the bleeding edge of cellular technology for about a
decade. Going back to 2003 (at least) they've been using Qualcomm radios for
example. In more modern times they are assembling someone else's radio, GPU
and running someone else's OS. I'm sure they _do_ have some valuable IP but
given the low sale price I'm thinking it's getting seriously overstated. In a
$150B/year SmartPhone industry that continues to grow how are these super
valuable patents only worth $9B?

------
jmvoodoo
I wonder if Motorola's patent portfolio will be enough to keep the lawyers at
bay?

------
darklajid
Oh. Can we bury MotoBlur now already? Please?

------
brudgers
The Razor is still the favorite among the phones I've owned, and the StarTac
is the only phone I ever truly lusted after, but I can't help feeling that
this purchase turns Google into just another conglomerate. And without any
intent at snark, the first thing this reminded me of was AOL - seven years ago
it would have been brilliant, today the looks like a committee decided to take
the "nobody ever gets fired for" approach. Google's mobile strategy just seems
incoherent.

------
rch
Seems odd that nobody is mentioning spectrum ownership. Maybe now we could
start to see some areas with open/free access to high-bandwidth wireless data
networks.

~~~
jauer
MM holds spectrum?

~~~
rch
Not sure actually - and quick searching only turns up sparse info around the
700 MHz and 2.5-2.6 GHz auctions, along with a few bits about LTE and WiMax.
Maybe there are some long-term licenses or other agreements that could prove
useful?

I guess things are unclear at best, but there is enough content to keep me
curious about the possibilities.

------
lugia
I'm not against companies using Google flexible UI to innovate the interface
but I strongly believe Android needs a good example of consistent user
experience. Everything is just too fragmented right now. Just look at system
icons alone in any Android phone, they are of million different styles.

With Motorola, Google should try its best to have a phone with everything
thought out from hardware to software design.

------
xedarius
A companies identity is a peculiar thing. Remember not so long ago it was
rumored that Microsoft was going to buy Nokia? People seemed to out of hand
reject this as a bad move. Yet Google comes along (with arguably the same
ambitions) and buys Motorola (makers of the 68000 probably the greatest chip
ever created), and everyone seems to think it's a pretty good idea.

------
ck2
Whoa. You know what would be even more interesting than this would be Google
going after ARM and it's slew of licensing.

I wonder if this will make better or worse Motorola mobile phones. Will phones
be pushed into retirement more early without upgrading their version of
Android? Or will they have a longer software update cycle to keep them up to
date in features?

~~~
ConstantineXVI
There's no way an ARM acquisition by Google (or Apple, or Microsoft) would get
past anti-trust issues; given that ARM, for all intents and purposes, owns the
mobile market. Even if it got through, there'd be enough strings attached that
there wouldn't be any value in it.

------
St-Clock
Maybe Google did this partly to acquire patents from Motorola mobility (I
don't know if they have any, but they must).

~~~
mtts
Yup, they do. 24500 of them, according to the press release they sent out when
they split off from the rest of Motorola.

------
peq
I hope google cares more about updating android for the motorola droid2. Maybe
I will finally get 2.3 :D

~~~
TillE
I swore off buying another Motorola product ever again after it took them an
absurdly long time to roll out 2.2 for the Milestone. 2.3 is nowhere in sight.
Shockingly terrible support for a flagship product.

We'll see how quickly Google can transform them. Android could really use a
line of official devices that are consistently updated like iOS devices.

~~~
evilduck
Motorola isn't the only manufacturer to fail their customers like that.
Samsung is worse and HTC is only slightly better, but overall the outlook for
any Android phone getting promptly updated over the duration of the contract
period is bleak at best.

------
tptacek
Doesn't this create a huge channel conflict with all the other phone hardware
producers using Android?

------
wgren
On one hand, other Android based phone manufacturers are clearly going to face
an uphill struggle if Google are going to release new versions of the OS on
their own devices first.

On the other hand, it will hopefully provide some protection against being
sued by Apple+Microsoft.

~~~
sigzero
It doesn't help against Oracle though. If the OS goes what does it matter? Not
that I think that will happen. More likely Google will be force to shell out
some cash to Oracle.

~~~
felipemnoa
I wouldn't be so sure. There is a chance that they can find a patent or two
among the 24 thousand that they can use against Oracle.

------
rokhayakebe
Assuming they spent the money for patents, is this the best way to resolve
this issue? Would it not be easier to throw 1M a thousand time over and let
developers create solutions around these patents and open source the projects?

~~~
tlholaday
You nées to pay the developer to create the workaround _and_ the litigator to
prove in court that the workaround does not infringe.

~~~
fpgeek
And the time, patience and resources to survive the wave of legal attacks
(including temporary setbacks) until the litigator succeeds...

------
wilhelm
Now, that explains the recent agressive hiring. I was wondering what they were
up to.

------
fbnt
By the look of motorola solutions website, there's nothing that links the
newly acquired company, at least directly, to the mobile phone hardware
market.

From Wikipedia:

    
    
       Motorola Solution Corporate structure
    
       The company is structured into two divisions:
    
       Enterprise: Comprises communications offered to government enterprise 
       mobility business.        
       Motorola develops advanced data capture, wireless infrastructure, bar 
       code scanning, two-way radios and business pagers, wireless broadband 
       networks and RFID solutions to customers worldwide.
    
       Government: Produces public safety and government products. Motorola 
       develops analog and digital two-way radio, voice and data communications 
       products and systems, Wireless LAN Securities and mobile computing, 
       among others.

~~~
iaskwhy
It was Motorola Mobility, not Motorola Solutions:
<http://en.wikipedia.org/wiki/Motorola_Mobility>

~~~
fbnt
Thanks. Clearly, I'm still sleeping.

------
Caballera
Maybe now Google will do something to help App developers from being sued.

------
larrik
I'm surprised no one has mentioned this, but MY first thought was Google
bought Motorola so they can directly defend Android against Apple's Samsung-
style lawsuits (which are now including the Xoom).

------
kennethologist
Motorola recently bought Symbol is this included in the acquisition? If so
this is huge and I wonder what is Google's plans for the rest of the company
outside of the phone division.

~~~
18pfsmt
I realize this is an old converstaion, but, just so you know, Motorola bought
Symbol about 5 years ago, but more recently, Motorola was split up into two
companies: Motorola Solutions (B2B focused-> Symbol is a part of this
business), and Motorola Mobility (more consumer focused). It is this second
company that Google acquired. They are traded under the symbols MSI, and MMI,
respectively.

------
hessenwolf
Before we laud Google's awesome engineering capacity too much, perhaps we can
consider the fuck-awful interfaces for adwords and adsense... It's not without
its weaknesses.

------
babar
Everyone is focusing on mobile patents, but what impact does this have on the
lawsuit with Oracle? Didn't Motorola have a Java license? Would that protect
Google?

------
ewanmcteagle
Will they allow motorola employees to work on google things? I've known
motorola programmers and they are not at all of the same caliber as google
programmers

~~~
jrockway
I was at DoubleClick when it was bought by Google -- same issue. I left before
the deal was completed, but it is my understanding that many people were told
"we'll give you a year's salary if you would please just not come to work
anymore". In a few months, everyone I knew from that job (minus a select few
who _were_ Google material) was working somewhere else.

------
code_duck
Holy wait, what?

I guess this means I __will __be buying a Motorola phone next time. I wasn't
very happy with my Droid 2, overall but I do trust Google.

------
pnathan
Manufacturing is a _whole_ 'nother bag of chips from software development.

Best of luck to Google, they're in for a ride.

------
jwr
Google buys Motorola Mobility, not Motorola. The title should be corrected, as
it's overly sensational now.

------
Akuma
So, did Google just buy a lot of "bogus" patents to be used in their "open"
platform now or what?

------
jsskate
This is a good way for Google to get software into the non-smartphone market.

------
qw
Perhaps we will see a "Google Xoom" that will be able to compete with iPad.

~~~
molecule
Nexus Tablet?

------
walla
The shroud of the Dark Side has fallen. Begun, the Patent War has!

------
vondur
Wow, Google is pulling a Microsoft by entering into competition with its
former partners. I can't believe that LG or Samsung are going to be excited
about this. I guess that is the price you pay when you don't have control of
the software.

------
Jayasimhan
I think this would be one of the biggest bets in Larry's career.

------
schiptsov
Nice move, really. Now it is time for Apple Samsung pair? ^_^

------
av500
1) grab the patents

2) sell the non-smartphone business to ZTE or Huawei

3) try to make (android) smartphones and fail the same as non-google motorola
did, then realize it does not matter because of 1)

UPDATE: 4) sell the Motorola _brand_ name to ZTE or Huawei

------
exit
i hope they hire a few new product designers while their wallets are open.
motorola phones aren't vanishingly minimalistic enough.

------
matmann2001
I just quit my job at Motorola on Friday.....

~~~
vyrotek
Are you saying that you had you stayed you might have benefited somehow? Were
you in the 'mobility' division? Did you leave stock options?

------
cma
But they could have bought 2.5 Dropboxes!

------
pinaceae
good for Nokia, as it shows that Google now has the possibility to close down
Android.

~~~
ConstantineXVI
Technically, yes. However, given how much other OEMs have invested into
Android, any significant special treatment to Motorola will have the anti-
trust dogs on them in no time. With the scrutiny Google's under right now,
they don't have much of a choice.

------
dotcoma
ok, 24,500 patents. And - I know it's old-fashioned - how many employees?

~~~
drivingmenuts
Sad to say, I don't think employees count anymore. It's all about locking up
the patents.

OTOH, X number of people now work for Google without having to take those
quizzes.

~~~
elliottcarlson
From what I have read in previous HN threads - merged in employees still have
to interview for placement purposes - could be off on that one though, but I
em pretty sure I have read this more than once. Could also be a different
story if the nature is more of a talent acquisition, but that is clearly not
the case here.

------
bergie
I wonder how other Android manufacturers will react to this. Maybe it'll boost
MeeGo?

~~~
yuvipanda
MeeGo was stillborn.

~~~
bergie
I'd say that is too early to say. Though the departure of Nokia was
disappointing.

------
dillon
Good for Google!!

------
jdavid
buying Palm for $1billion seems like a steal.

------
eurohacker
if search engine starts to produce self-moving cars and mobile phones its time
to worry how fair and balanced their search results will soon be,

search engine as a competitive advantage for a phone manufacturer ))

------
payopepe
Hay que tener dinero de sobras, no?

------
thom
1) Buy a hardware company.

2) ?

3) Sell more advertising on search results.

------
digamber_kamat
I think RIM should now invest their remaining cash into making a REST IN PEACE
board for their grave.

------
stravid
MOTOROLA Launch Date: 1928

GOOGLE Launch Date: 7/9/1998

~~~
iqster
Motorola != Motorola Mobility. Motorola Mobility is a recent spin-off from
Motorola and encompasses the original company's handset business as well as
its related patent portfolio.

What does Motorola do? Well ... cellular infrastructure is their core
business, and they also have services/solutions for things like emergency
response services (e.g. 911 in the US), law enforcement, and I think they
still make walkie talkies.

~~~
pietrofmaggi
Motorola was split in two companies the past 4th of January.

Motorola Mobility (MMI) and Motorola Solutions (MSI). The cellular
infrastructure, part of MSI, was sold to Nokia/Siemes Networks.

Motorola Solutions in mainly the Enterprise Mobility Business (Mobile Rugged
Devices), WiFi systems, Tetra networks and a lot of other Government stuffs.

~~~
iqster
Thanks for the clarification. While MSI is considered the successor of the
original Motorola, you are absolutely correct. I didn't realize that the cell
infrastructure division(s) got sold (used to work on CDMA base-stations a
decade a go). Makes me a bit sad. Do you know if they kept the employees?

~~~
pietrofmaggi
They keep them till last week. The last news I read was about 1500 layoffs:

[http://www.fiercewireless.com/europe/story/nokia-siemens-
cut...](http://www.fiercewireless.com/europe/story/nokia-siemens-
cuts-1500-motorola-staff-gsm-and-wimax-teams-hit-first/2011-08-05)

