Moto wasn't just a patent play for Google. Its patents are worth less than half of the price it paid. So what happens next?

Sarah Thomas, Director, Women in Comms

July 25, 2012

2 Min Read
Google Reveals Moto's Patent Price

Motorola Mobility's patents and "developed property" are worth $5.5 billion, less than half of what Google (Nasdaq: GOOG) spent to acquire the company, the Android maker revealed in a regulatory filing Tuesday.

Google spent $12.4 billion to acquire Moto, a deal that closed in May after regulatory reviews. The driving force behind the merger was Google's need to shore up its patent defenses to fight the lawsuits its handset maker partners are facing. (See Google Closes $12.5B Motorola Deal .)

Of the remaining $6.9 million Google spent, $2.9 billion was for cash acquired, $2.6 billion for goodwill, $730 million for customer relationships and $670 million for other net assets acquired, the SEC filing revealed.

"The acquisition is expected to protect and advance our Android ecosystem and enhance competition in mobile computing," Google wrote in the filing.

The company didn't divulge its plans for Motorola on its second-quarter earnings call last week, only promising changes to come. It reported that Moto contributed $1.25 billion in revenue to the merged company, but it also posted an operating loss of $233 million. (See Google Keeps Quiet on Plans for Moto and Google Posts $2.79B Profit in Q2.)

Why this matters
Given how much it spent on Moto compared to its patents' worth, Gogle may have more in store for Moto than just a patent play -- although it certainly needs that as well.

Google will have to tough task ahead in making Motorola smartphones solid competitors to market leaders like Apple Inc. (Nasdaq: AAPL) and Samsung Corp. , while not alienating any of its other partners. (See Google & Moto: What's Next? and Google Plays Favorites With Moto Buy.)

At the same time, Google is likely to also be shopping around Motorola's cable assets, including its set-top boxs, cable modems, video processing and access network gear. (See Light Reading Poll: Who Will Take Motorola Home?)

For more

  • Motorola Home Adds M&A Expertise

  • Who's Angling for Motorola's Cable Unit?

  • Motorola's Home Unit Hires New Leader

  • Cover Sheet: Google to Acquire Moto Mobility

  • Google Buying Moto Mobility for $12.5B

— Sarah Reedy, Senior Reporter, Light Reading Mobile

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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