Google: Patent Value From Motorola Purchase Totals $5.5 Billion

 
 
By Todd R. Weiss  |  Posted 2012-07-25 Email Print this article Print
 
 
 
 
 
 
 

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 Commission€”the 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 acquisition.

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/O€”in 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 company.

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 months€”how to include mobile search services and Android€”are 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.  

 
 
 
 
 
 
 
 
 
 
 

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