Motorola, Google’s Money Pit

Ben Popper, writing for The Verge, after Google announced that its Motorola division is on pace to lose over $1 billion this year:

Does a money pit like Motorola have a major impact on Google’s bottom line? In a lot of ways, the answer right now is no. Despite the losses, Google is profitable overall, and its cash on hand has grown steadily. But if Motorola continues to slide, Google may eventually be forced to write down the cost of the $12.5 billion acquisition — and its investors could clamor for the company to scuttle what has so far been a painful experiment into the world of mobile hardware. “Looking at the purchase I’m still scratching my head about why they did it,” says Avi Greengart, the research director for consumer devices at Current Analysis, “and how they see it playing out going forward.”

Almost $13 billion in the hole to start and still digging.

★ Monday, 21 October 2013