Hacker News Reader

Comment by cryowaffle | Hacker News Reader

Google bought Motorola as a defensive patent move, it's almost completely intangible.

12.5+ billion dollars isn't intangible, even for Google.

He's trying to say that Google paid something tangible for something intangible. It's difficult to estimate the present value of a patent portfolio, ergo it's "intangible".

That's not working out too well.

http://www.theverge.com/2013/4/26/4271432/does-anyone-know-w...

From that article: "Which again leads to the question: why did Google buy Motorola? The real answer is worth $12.5 billion."

I love how people keep trotting this number out. Nevermind the fact that Moto had $3 billion in cash[1], which immediately became Google's cash when the purchase went through, so the real price was closer to 9.5 billion. Motorola also had 24,500 patents in its portfolio[2]. Apple, MS, and RIM paid 4.5 billion for 6,000 Nortel patents not long before the Moto sale.

[1] http://dealbook.nytimes.com/2011/08/16/whats-behind-the-heft...

[2] http://www.economist.com/blogs/babbage/2011/08/valuing-paten...

But that 9.5 billion investment is yet to return a profit:

Motorola, acquired by Google in 2012, racked up a loss of $218 million before items, more than four times the $49 million it lost a year earlier.

http://www.dailyfinance.com/2013/07/19/google-earnings-ad-ra...

They also recovered $3 billion by selling the set top box business.

Do you have any data on the quality of the patents? I thought the Motorola ones were mostly standards-essential and were a "second tranche" after the cream of the crop was previously sold off. But I can't find a good reference that I believe...

It's anyone's guess. How do we know how many patent suits were avoided because Google had a new arsenal to fight back with? How many new patents have Moto engineers filed since the purchase? How do we put a dollar value on the hardware expertise that Google picked up in the purchase?

Reply on news.ycombinator.com