Lenovo to buy Motorola from Google for $2.91B

[photon]

http://googleblog.blogspot.ca/2014/0...-mobility.html

$2.91 billion. That's quite a stretch from what Google paid for it (though Google keeps the patent portfolio).

[cal_guy]

7.1 billion for Motorola's patents(after you factor in the cable box unit that Google sold last year) is a pretty steep price.

[psicodude]

Great article on why the deal worked out to be fairly decent for Google in the end: http://gigaom.com/2014/01/30/google-...out-just-fine/

[nfotiu]

This is disappointing news. There is a lot to like about the moto x and the direction they are heading. The overall user experience of that phone is second to none. I really like what google is doing in terms of trying to compete on the non subsidized price as well, and was really hoping they'd disrupt that market and was hoping they'd kill off the whole idea of subsidized phones. I doubt Lenovo will be interested in carrying on that movement.

[FlamingLonghorn]

Lenovo just dropped $5 billion on acquisitions. Must be nice to be backed by the Chinese gov't and never have to worry about cashflow. Although I think the IBM server purchase was a mistake. It still might get blocked:

http://online.wsj.com/news/articles/...38033941796924

[Azure]

Another article on why the sale might make sense for Google despite the apparent loss.

http://mobilesyrup.com/2014/01/30/go...r-all-parties/

[ericschand]

Originally Posted by cal_guy

7.1 billion for Motorola's patents(after you factor in the cable box unit that Google sold last year) is a pretty steep price.

Shamelessly stolen from http://slashdot.org user GeLeTo:

- $3.2B Moto's 2011 cash
- $2.4B Moto's 2011 deferred tax assets
- $2.35B Moto's Set-top-box business sold in 2012
- $75M Moto's factories business sold in 2013
- $2.91B Moto's Mobility business sold in 2014

So the "patents, engineering talent, and insight into the mobile-device marketplace" cost $1.56B, not $7.1B

ers

[Azure]

Factor in the rest of the tax benefits Google had from running a loss with Motorola while they owned the company and it gets even better.

Looks like a pretty genius move at this point.

[opendoor]

I wouldn't say it looks like a genius move; it just looks like they didn't lose as much as it would appear at face value.

As for the tax benefits, I'm not sure they're as valuable as people are suggesting. Some things like depreciation of capital expenditures make sense (though you'd think those would stay with Motorola which means Google would've only reaped a couple of years of benefit) but Motorola's operating losses didn't offer a huge advantage to Google. Sure they can write them off, but you have to actually lose the money first before you get the tax break.

I think it's probably fair to say they took a hit of a few billion dollars, but they still have the patents and other benefits from running the company for a couple of years so they may feel it was worthwhile. I'm not sure I'd categorize it as some sort of coup for Google though.

[Mazrim]

Originally Posted by nfotiu

This is disappointing news. There is a lot to like about the moto x and the direction they are heading. The overall user experience of that phone is second to none. I really like what google is doing in terms of trying to compete on the non subsidized price as well, and was really hoping they'd disrupt that market and was hoping they'd kill off the whole idea of subsidized phones. I doubt Lenovo will be interested in carrying on that movement.

There are definitely a couple things on the Moto X that wouldn't have happened without the close relationship they had with Google. On top of that, I wonder if they'll ever do another Spotlight thing with Lenovo taking control...there was supposed to be more but all we've gotten was Windy Day so far.

[oilyfan]

Originally Posted by opendoor

I wouldn't say it looks like a genius move; it just looks like they didn't lose as much as it would appear at face value.

As for the tax benefits, I'm not sure they're as valuable as people are suggesting. Some things like depreciation of capital expenditures make sense (though you'd think those would stay with Motorola which means Google would've only reaped a couple of years of benefit) but Motorola's operating losses didn't offer a huge advantage to Google. Sure they can write them off, but you have to actually lose the money first before you get the tax break.

I think it's probably fair to say they took a hit of a few billion dollars, but they still have the patents and other benefits from running the company for a couple of years so they may feel it was worthwhile. I'm not sure I'd categorize it as some sort of coup for Google though.

I think you are confused, you need to declare an income before you can use tax losses, something that Google can certainly take advantage of.