As I previously stated in my last blog post, Google purchased Motorola for $12.5 billion dollars in August of 2011. However, in January of 2014, Google decided to sell Motorola to Lenovo for $2.9 billion dollars. This prompted many individuals to discuss the financial acumen of Google for selling the company for a sum almost $10 billion dollars less than what it originally acquired it for. However, when we look at a breakdown of how Google sold the company, we can see that the company's deal wasn't all that bad. In fact, it allowed Google to remain competitive in the mobile technology market against its competitors. Google sold the set-top division of Motorola for $2.4 billion dollars, acquired the $3 billion dollars on Motorola's balance sheet, and the remaining amount was part of the intellectual property folder that Motorola accumulated.
The sale of Motorola to Lenovo is seen as a success by Google due to the large amount of patents acquired by the software giant. Instead of focusing on purely the financials, Google set itself up for success against the other major players in the mobile technology space. Many speculate that this was Google's primary reason for acquiring the company in the first place. Google claims that the patent portfolio of Motorola is arguably better than that of Nortel's, which Apple and Microsoft bought. The value of the Nortel's patents was around $4.5 billion dollars. Google, on the other hand, given all the sales of individual Motorola units, netted the patent portfolio of Motorola's for a cheaper price after adjusting. While it remains to be seen on how Google will leverage it's newly acquired patents, it can definitively be said that this will make for a very complex, but equal patent war between the major software giants.
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