Analyst says after failing to help with patent cases, Google overpaid for Motorola

When Google offered to buy Motorola for $12.4 billion in August 2011, the idea was to use the company's massive IP portfolio to protect Google from the number of patent cases that were beginning to spring up. The deal closed last May and as we've seen, has really not helped Google all that much. Just the other day, a judge in Washington state told Motorola that it will not get the $4 billion a year from Microsoft that it had been seeking for licensing standards-essential patents related to the H.264 wireless standard and the 802.11 wireless standard. Instead, the judge ruled that Motorola is entitled to $1.8 million a year for the licensing.

Last week, the ITC ruled that Apple's patent for a proximity sensor was not infringed on by Apple. Motorola claimed that Apple's defense of prior art was invalid since that was for a device using buttons and Motorola's patent covered a touchscreen device. Motorola will probably appeal the ruling.


The number of cases where Google could not use Motorola's patents to its advantage have clearly made it seem that Google had overpaid for Motorola. According to Erin-Michael Gill, managing director of MDB Capital Group LLC, an investment bank that specializes in patent issues, "the perceived value of the portfolio is clearly less" than what Google paid, said. As a business, the deal has not been a winner either. Motorola Mobility's 2012 revenue of $4.14 billion, was about 8 percent of Google’s total sales. Motorola posted $1.1 billion in losses last year. 

Google remains positive about Motorola's future.The company has become known for its Motorola DROID RAZR MAXX and Motorola DROID RAZR MAXX HD models, both with a 3300mAh battery that allows power users to run their phone more than one day on a single charge. Then there is the rumor involving the Motorola X which remains a mystery. The latest we've heard is that the device will have 20 colors that buyers can select from.


source: Bloomberg