Google Sells Off Motorola to Lenovo for $2.91 Billion

by Istvan Fekete on January 30, 2014

Nineteen months after acquiring Motorola Mobility for $12.5 billion, Google is selling it off for a fraction of that amount – $2.91 billion – to Lenovo. To put it in another way: despite recouping some of its investment by selling the cable box unit for $2.3 billion, acquiring Motorola was the worst investment in the search giant’s history.

“We’ve just signed an agreement to sell Motorola to Lenovo for $2.91 billion. As this is an important move for Android users everywhere, I wanted to explain why in detail.”

“We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users. Over the past 19 months, Dennis Woodside and the Motorola team have done a tremendous job reinventing the company. They’ve focused on building a smaller number of great (and great value) smartphones that consumers love. Both the Moto G and the Moto X are doing really well, and I’m very excited about the smartphone lineup for 2014. And on the intellectual property side, Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners.”

There are a couple reasons, but let’s take Motorola’s patents as an example. When the news of the Googlorola deal broke, Google said Motorola’s patents would strengthen the company’s patent portfolio and provide wider protection against threats from Microsoft, Apple, and others.

Fast forward to today, and the result of that acquisition is as follows: Google asked for $4 billion in annual royalties from Microsoft, but the judge ruled only $1.7 billion for using Motorola’s patents.

Furthermore, those patents have brought the company regulatory scrutiny and legal losses, as a jury found that Motorola was violating its industry obligation to licence some of its patents on fair, reasonable and nondiscriminatory (FRAND) terms.

There are, however, a couple of benefits of the Google–Lenovo deal as well: maybe Lenovo, the No. 2 Android smartphone manufacturer in China, will be able to do much more with Motorola’s brand than the search giant did.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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