Value Thresholds

David Gelles, reporting for The Financial Times on Eric Schmidt’s criticism of Apple, Microsoft, and RIM for (in Gelles’s words) “spending richly on patents rather than innovating”:

Google opened the bidding for the more than 6,000 Nortel patents in April with an offer of $900m. After a bidding war ensued, the search group was eventually outgunned by the consortium, which together paid $4.5bn. “The price exceeded our value threshold,” Mr Schmidt said.

Apparently Google had a different “value threshold” when they sought to buy Groupon:

Google’s much-rumored acquisition of Groupon is off, we’ve confirmed with a source with knowledge of the deal. The news was reported earlier by Chicago Breaking Business, and we’ve verified that the deal is indeed off.

The two companies have been in serious negotiations for at least the last week, with reports stating that Google was bidding as much as $6 billion for the red-hot local deals company.

Back to Gelles’s story on Schmidt and Google:

“We chose not to bid at that level. I presume people spent $4.5bn to do something with them,” he said of the group that bought the bankrupt communication equipment maker’s patents. “They didn’t just wake up and say ‘oh, we’d like to have this patent portfolio’. I don’t know what their intent is, but we, as a company, worry that this is an attempt to use patents rather than to innovate.”

Translation: Google, as a company, is worried that Android violates one or more of the Nortel patents.

Tuesday, 19 July 2011