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How Much Did Google Really Lose on Motorola?

Michael de la Merced, writing for NYT Dealbook:

When Google bought Motorola, the hardware maker had about $3 billion in cash on hand and nearly $1 billion in tax credits. So that brings the original deal’s price down to about $8.5 billion.

Then, Google sold Motorola’s set-top box business to Arris for nearly $2.4 billion. That lowers the price down to roughly $6.1 billion.

Now, Google is selling Motorola Mobility — primarily the handset business, along with a few patents — for $2.9 billion. So we’re at about $3.2 billion.

I’m with him so far, but when he takes Google’s claims that Motorola’s patents (which Google will retain rights to) are worth $5.5 billion, because that’s what Google claims they’re worth, that’s where he loses me. Motorola’s patents have lost in court every time they’ve taken them to court. E.g. the chart on this post from The Verge.

Update: De la Merced doesn’t take into account that under Google, Motorola lost money every single quarter — several billion dollars in total.

Wednesday, 29 January 2014