So what did Google get by buying Motorola Mobility? At least $5.5 billion in patents that could help the company as it expands its reach into mobile hardware and services around the world, according to the company's latest SEC filing.
When Google announced in August 2011 that it was buying
handset maker Motorola Mobility
for more than $12 billion, many financial
and IT analysts said they were surprised because they didn't know what the
search giant was planning to gain from the purchase.
Less than a month later, though, Google CEO Larry Page explained
the strategy in a corporate blog post
: "Our acquisition of
Motorola will increase competition by strengthening Google's patent portfolio,
which will enable us to better protect Android from anti-competitive threats
from Microsoft, Apple and other companies."
Now the company has disclosed some more clues about the Motorola patent
portfolio in its latest quarterly financial filing with the U.S. Securities and
Exchange Commissionthe Motorola patents were worth
about $5.5 billion
of the $12.4 billion that Google paid for the company.
"On May 22, 2012, we completed our acquisition of Motorola, a
provider of innovative technologies, products and services that enable a range
of mobile and wireline digital communication, information and entertainment
experiences," Google reported in the SEC filing. "The acquisition is
expected to protect and advance our Android ecosystem and enhance competition
in mobile computing."
The details of the Motorola patent portfolio's value to Google come less
than a week after Google
reported its second-quarter financials
its first report since the Motorola
For the second financial quarter of 2012 that ended June 20, Google posted
second-quarter revenue of $12.21 billion, which is a 35 percent increase from
the $9.03 billion the search company earned during the second quarter of 2011.
"Google stand-alone had a strong quarter with 21 percent year-on-year
revenue growth, and we launched a bunch of exciting new products at I/Oin
particular, the Nexus 7 tablet, which has received rave reviews," Page
wrote in a statement for the earnings call. "This quarter is also special
because Motorola is now part of the Google family, and we're excited about the
potential to build great devices for users."
The $12.21 billion second-quarter revenue was up 15 percent from the first
quarter of the year, when Google reported $10.65 billion in revenue, according
to the company. GAAP net income reported in the second quarter of 2012 was
$2.79 billion, compared with $2.51 billion in the second quarter of 2011.
Since Google's acquisition of Motorola was completed in May, the effects of
that purchase are not yet reflected in a full quarter.
So far, however, revenue from the Motorola hardware and other product lines
totaled $1.25 billion ($843 million from the mobile segment and $407
million from the home segment), or 10 percent of Google's consolidated revenue
in the second quarter of 2012, the company reported.
The recent financial news from Google comes at a busy time for the company
as it also works to resolve antitrust concerns in Europe. According to a July
24 development, Google is
apparently getting close to a settlement deal
with the European Union to
resolve antitrust issues that would avoid formal charges against the search
That progress for the company comes after months of ongoing negotiations
between Google and the EU.
The exact terms of that deal have not yet been announced publicly and the
arrangement has not yet been finalized, but the main sticking points that have
been raised in recent monthshow to include mobile search services and
Androidare being addressed, according to reports.
Negotiations for a settlement deal have been in the works for more than a
month. Last week it was reported that Google's
Android technologies would have to be included
as part of any agreement for
any deal to pass muster with the EU.