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Comment by jonas21 | Hacker News Reader

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jonas21

The way this worked out was that Google spent $12.5B, but they got:

Cash: $3B

Tax Credits: $1B

Sale of Motorola Home: $2.4B

Sale of Motorola Mobility: $2.9B

---------------------------------

Total: $9.3B

So Google ended up paying about $3.2B for Motorola's patent portfolio, which was valued at $5.5B.

https://dealbook.nytimes.com/2014/01/29/did-google-really-lo...

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you can make the math look okay as long as you ignore the $200-500M per quarter in losses that google swallowed for the 2.5 years that they owned motorola.

Which would make the deal about break even, depending on whether that was more like $1B or $2B lost each year.

It's almost as if the people running Google are not idiots.

That's a stupid thing to say. People running large companies can be idiots. Look at Microsoft's Nokia deal.

There’s a difference between being an idiot and losing a bet, right?

Yes, but everyone thought it was mad at the time.

I wouldn't say that everyone thought that. I frequently said things about the foolishness of that bet only to be shouted down on internet forums.

Steve Ballmer strikes me as an idiot.

He doesn't run google.

Gates thought he was sharp. Do you think Gates can't tell the difference?

At the same time, what was the alternative? If you wanted Motorola type patents... you can't just buy them off a shelf.

There's a limited supply, and only some of them are ever for sale.

Quite so, and the cost of Moto also does not include the management distraction of doubling headcount and diluting company culture during the period where Google owned Moto.

You can look at the HTC deal as the learnings from the Moto deal: Buy only what you need, spend no time, money, or attention on things you will need to get rid of.

From business perspective, people should also calculate cost allocation to opportunity winning market and risk being sued by competitor

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