More seriously, I think the fact that the person high up enough to lay three billion dollars on the table was also the kind of person who knows about Meissel–Mertens constant says a lot about google's structure. Either that or the whole thing was a whimsical piece of obtuse preplanned PR, which still says a lot.
I don't know if this is a deliberate strategy, or if it simply stems from the company's culture and values, but it sure helps them. I personally love them. Winning the hackers and early adopters is a key to winning a market. I'd bet the majority of Google+ early adopters belong to the tech crowd. Similarly, many Android early adopters (from the tech crowd) convinced their friends and family to switch.
It's also good for recruiting :)
Does anyone have a link to a good overview of what kind of things are in the portfolio?
Or is it? I'm thinking that it does make economic sense, but only if
you buy in bulk.
The vast majority of patents (not even limited to software patents)
make no money, are never enforced, and are completely unused in every
sense of the word. Even a patent lawyer has admitted this to me.
But in very rare, unpredictable, and seemingly capricious cases, it's
worth a fortune. The best example is the patent purportedly for inventing
wireless email that allowed NTP to extort $600 million from Research In
Motion a couple years ago.
If you buy patents in bulk, you might even be able to achieve a
return despite the randomness in value.
I'm going to make the analogy to owning a gun and deciding how many
bullets (patents) to buy:
- A dozen bullets and you can (maybe) protect yourself.
This is your defensive patent portfolio; if sued, you can maybe
find some way to countersue.
- Thousands of bullets and you can wage war.
This is your attack patent portfolio.
- But a single bullet is good only for suicide.
Start-ups that spend their time and energy filing one
patent application probably kill themselves. I saw one case
where it happened.
I think I'm going to call this principle the Patent Portfolio
Price Power Law. In a ruthless business sense, a LOT of software
patents makes sense.
People do the same thing. How many rich guys buy a $500k Ferrari that is never driven?
None. No Ferrari costs $500k outside of an auction house, and even then that's a very rare price. The classic collectable ferraris go for far more, and the "average" ferraris go for far less.
Unfortunately for Google, the patents were auctioned off in reality.
They probably decided that they may as well have some fun with it in the meantime
(although google has a history of using mathematical significant figures in financial dealings, such as in their S1 filing)
Essentially people try and convey information to the other bidders through the amounts of their bid. Like putting an area code at the end of a large bid to indicate that is the market you want.
for eg. if the Greek government owed me $1B, I wouldn't call that cash on hand, but if the US government owed me $1B, it is
They really didn't expect this to happen? I'm a bit disappointed in Google for not thinking this through, if they really wanted to get them to protect the whole Android ecosystem.
EDIT: I also think Microsoft is focusing too much on making money on patents, rather than from their own product. Are they going to buy as many patents as possible that later they can use to act as a leech on Android ecosystem? That's a pretty perverse business model, and it doesn't make them look any better than Righthaven.
Presumably they ran the numbers and figured that the expected costs of defending against lawsuits based on these patents was around $4 billion, in which case they're better off not bidding higher.
You can't patent innovation, although you can attempt to stifle it with patents. If you're going to sue me on the grounds of patent infringement, I can go work on something else, but you're just going to be left holding your bag of patents. Like a bully on the playground, sure you've got the ball now, but nobody wants to play with you.
I think the bidding here wasn't such, so it probably not the reason here.
Also, keep in mind that lawyers tend to be much more politically connected than programmers.
And I suspect that this was a really bad move in this context on the side of Google's competitors. Oh and I am well aware that these companies got loads of cash on hand. But it can't last forever.
> Since the competitors had to stretch themselves for
> this one
> Oh and I am well aware that these companies got loads of cash
> on hand. But it can't last forever.
Either that, or they didn't like the Feigenbaum constant.
Typical childish behavior from Larry Page.