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Moto balked at Google's attempt to snap up only its patent trove, and convinced Google to up its price and buy the whole smash
September 14, 2011
Google (Nasdaq: GOOG) may be forming a strategy for Motorola Mobility LLC 's handset division and cable assets now, but it's growing more and more unlikely that the company had one when it first started courting Moto.
A preliminary special proxy statement filed by Motorola on Tuesday confirms that Google's original intent was to buy only the company's patent portfolio as Google looked to shore up its legal defenses for Android against Apple Inc. (Nasdaq: AAPL), Microsoft Corp. (Nasdaq: MSFT), BlackBerry and other competitors. (See Google Buying Moto Mobility for $12.5B .)
According to the filing, Google SVP of Mobile Andy Rubin started to discuss the idea with Moto Mobility CEO Sanjay Jha in July, but Motorola later fretted that "it could be problematic for Motorola Mobility to continue as a stand-alone entity if it sold a large portion of its patent portfolio."
Motorola was successful in getting Google to bite off all of Motorola Mobility instead. Google originally proposed to buy the company for $30 per share on Aug. 1, and following a series of negotiations, settled on the $40 per share that was announced in mid-August, the filing explains.
Moto also disclosed that it didn't try to shop itself to others, believing it was unlikely to attract a better price than what Google was offering. Plus, a failed attempt to sell "would be highly detrimental" to the company, Moto determined.
Motorola also kept Carl Icahn, the activist shareholder who had been pushing the company to consider strategic options for its wireless patents, apprised of how discussions were proceeding with Google. (See Moto Vs. Icahn 2: The Hunt for Patent Gold.)
Why this matters
The filing offers interesting reading on how rapidly the deal came together, but Google's apparent lack of interest in Moto's handset division and cable business will make everyone wonder what Google might do with those assets if it's successful in buying Motorola Mobility. Will it keep them and give it a go, or try to sell them off?
In the meantime, there's been much speculation about what Google might do with Moto's cable and video technology businesses, with some viewing the purchase as something that could help to reinvigorate the struggling Google TV platform, or give Google a straight path to cable MSOs and other pay-TV operators so it can push adoption of its Android OS in set-top boxes. (See Will Google Droid Up the Set-Top Box? )
Get caught up on the Google-Motorola deal using our handy-dandy cover sheet.
— Jeff Baumgartner, Site Editor, Light Reading Cable
Senior Editor, Light Reading
Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.
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