I think it's more the case that Google has to fight both sides of this: acquire patents for defense in the short term, lobby congress for patent reform in the long term.
I think long long-term, the friction of the patent system goes against Google's incentives. Google isn't a hardware company (even though they just bought one). They sell search ads, and their complements are hardware, software, everything between consumers and search ads. If patents in general are a tax on innovation, that's bad for Google.
I'll believe that Google wants patent reform when I actually see them lobbying for it. For now it's all wishful thinking.
Any and all legal expenses and patent royalties in "the short term" would certainly be less than $12B. The Moto Mobility purchase really stinks of long term investment in IP and capitulation before the system.
yeah I've been saying this since the oracle deal. 8 billion looks small now for what Sun was. They would also own Java and other important tech that they could have used a lot more than what Motorola offers them. I wonder if they even tried to buy Sun.
I don't think buying Sun would have protected Android from Apple/Microsoft/Nokia/etc., just as buying Motorola won't protect it from Oracle. If anything, buying both may have made sense.
Buying Sun would only have helped Google in one of their current court cases (and not one that buying Motorola was intended to help). Hindsight would have dictated buying both.
Google culturally is very pro-Java, and decided to bring that to their new mobile platform, without the legacy baggage of J2ME. It was an engineering decision as much as it was against licensing Sun IP, maybe in light of how poorly J2ME ever did as a development platform.
Android was in development since 2005 and the major post-iPhone change that happened was a larger screen and virtual keyboard, which is what every modern phone has.
There are companies which have blazed trails and Google has not blazed many with its products; but they bring something equally as important to customers as innovation: competition and choice.
"Google didn't take IP seriously, bidding silly numbers (such as pi billion dollars) for the Nortel patents."
Why does everyone keep rehashing this statement that was asinine the first time? How do the specific digits of their bids say anything about Google's stance towards IP? Pi billion is over 141 million more serious of a bid than the 3 billion that I guess would have made everyone more comfortable.
“Google was bidding with numbers that were not even numbers,” one of the sources said. “It became clear that they were bidding with the distance between the earth and the sun. One was the sum of a famous mathematical constant, and then when it got to $3 billion, they bid pi,” the source said, adding the bid was $3.14159 billion. “Either they were supremely confident or they were bored.”
Google thought they were playing a game, lost, and has been crying about it ever since.
Pointing out the ridiculousness of a system isn't the same thing as crying. Neither is making a serious play in the space with the purchase of MMI. Google can simultaneously believe the system is broken and play the system until it is changed.
In hindsight, it's easy to imagine the Google executives bidding fancy numbers while rubbing their hands in glee saying "Haha, lets drive up the costs for Apple/MS and waste their cash while we're anyway going to complain to the DoJ like we did with the Novell patents and the deal to buy Motorola is almost closed. Haha. What next, Planck's constant or the Avogadro number?".
Not that it actually happened, but certainly plausible given what we know.
I've done so once before, but I've not seen in any other comments anywhere in these threads mentions of this notable insight, "Motorola Mobility held $5.5B in cash and deferred tax assets; this could put Google's (GOOG) real purchase price around $7B."[1]
I fear the essence of this story is true, that Google doesn't have a coherent strategy with regard to this fight, and its certainly out of their comfort zone, so this does feel more like someone flailing.
That being said, Google has a really deep pool of expertise in a lot of areas in house and if they can come up with a reasonable way to surface that expertise I would expect them to come up with a solid response.
The more I learn about Android and the way in which Google pursued mobile, the more I believe that Google never had a long term strategy, merely tactics aimed at being the first iPhone competitor - or rather they had a strategy to provide mobile services but the iPhone made their interface obsolete.
Their decisions regarding Android appear to have been made based on a corporate culture oriented toward trade secrets over patents, and their assumptions regarding IP appear to have been biased by that corporate culture - i.e. there's some viability to a clean room approach to copyright and trade secrets, there is not one for patents.
Google's "damn the torpedoes approach" got them into the marketplace quickly, but the mines are all still in the water and so is their fleet.
While the register portrays Google's moves as blundering, Dan Lyon's take is the exact opposite. I suspect it may be a while before we know which is true, although I want to lean towards Dan's view:
They write very good linkbait, deliberately inflammatory yet within the bounds of decency and often quite amusing. It is a conscious editorial decision I am sure, and keeps their advertisers coming back for more. They are after all a red-top tech news site.
I enjoy their style, and reflect carefully on the above paragraph whenever I read one of their more controversial articles. However, I don't think you're missing much by skipping them.
I think Dan's probably wrong on this. First, in the Novell deal MS ended up getting most of their money back, they basically just licensed the patents (part of the DoJ deal).
For Nortel there were at least 5 other consortium members -- MS, Sony, and EMC paid a total of $800M (not sure of the exact split). Apple paid $2.6B.
My point is that by doing a consortium approach they actually spent relatively little money on it, and they all cross-license. Google, OTOH, is paying the full $12.5B for Motorola.
Looking at MMI's balance sheet, they have $3B in cash. So Google is really paying $9.5B. And, IMO, they are getting so much more for that money than they would have received with a pure IP-only play like Nortel.
I suspect Dan is closer to right than wrong - particularly on the FTC angle.
I'm not saying this did wrong by not doing a pure-IP play, but I don't think they did a rope-a-dope.
In addition to the points I made earlier, Google driving up the price of patents works against them too. It's not as if Motorola doesn't seem what the going rate of Nortel and Interdigital patents are. In fact just last week Motorola said they were open to doing WP phones. That was purely a way to get the last dollar on the selling price.
My point is that Google didn't get AppleSoft to pay all that much since they did it consortium style. And the price Google paid for Motorola was probably higher than it needed to be if Motorola didn't value their patents with respect to prices they saw in the Nortel deal (and they're not stupid enough to have missed it).
first of all the nokia payment was not a one-off deal, as apple will continue paying royalties to nokia each fiscal year, for as long as they use the patents. clearly this reporter doesnt know what the facts are.
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[ 2.4 ms ] story [ 85.3 ms ] threadI think long long-term, the friction of the patent system goes against Google's incentives. Google isn't a hardware company (even though they just bought one). They sell search ads, and their complements are hardware, software, everything between consumers and search ads. If patents in general are a tax on innovation, that's bad for Google.
Any and all legal expenses and patent royalties in "the short term" would certainly be less than $12B. The Moto Mobility purchase really stinks of long term investment in IP and capitulation before the system.
No, that's the other Motorola, i.e. Motorola Solutions.
Google culturally is very pro-Java, and decided to bring that to their new mobile platform, without the legacy baggage of J2ME. It was an engineering decision as much as it was against licensing Sun IP, maybe in light of how poorly J2ME ever did as a development platform.
Android was in development since 2005 and the major post-iPhone change that happened was a larger screen and virtual keyboard, which is what every modern phone has.
There are companies which have blazed trails and Google has not blazed many with its products; but they bring something equally as important to customers as innovation: competition and choice.
Why does everyone keep rehashing this statement that was asinine the first time? How do the specific digits of their bids say anything about Google's stance towards IP? Pi billion is over 141 million more serious of a bid than the 3 billion that I guess would have made everyone more comfortable.
Google thought they were playing a game, lost, and has been crying about it ever since.
"We bid the sum of --" pinky to corner of mouth "-- NaN billion dollars."
What does this even mean?
Not that it actually happened, but certainly plausible given what we know.
Edit: New article supporting this theory:
Larry Page Just Made Apple And Microsoft Look Like Fools http://www.businessinsider.com/suck-it-applesoft-2011-8
http://www.theregister.co.uk/2011/08/15/google_motorola_the_...
[1]http://seekingalpha.com/article/278932-can-motorola-mobility...
That being said, Google has a really deep pool of expertise in a lot of areas in house and if they can come up with a reasonable way to surface that expertise I would expect them to come up with a solid response.
Their decisions regarding Android appear to have been made based on a corporate culture oriented toward trade secrets over patents, and their assumptions regarding IP appear to have been biased by that corporate culture - i.e. there's some viability to a clean room approach to copyright and trade secrets, there is not one for patents.
Google's "damn the torpedoes approach" got them into the marketplace quickly, but the mines are all still in the water and so is their fleet.
http://realdanlyons.com/blog/2011/08/15/suck-on-it-applesoft...
Did I get the wrong impression, and they can in fact be a useful source of new & commentary?
I enjoy their style, and reflect carefully on the above paragraph whenever I read one of their more controversial articles. However, I don't think you're missing much by skipping them.
For Nortel there were at least 5 other consortium members -- MS, Sony, and EMC paid a total of $800M (not sure of the exact split). Apple paid $2.6B.
My point is that by doing a consortium approach they actually spent relatively little money on it, and they all cross-license. Google, OTOH, is paying the full $12.5B for Motorola.
I suspect Dan is closer to right than wrong - particularly on the FTC angle.
In addition to the points I made earlier, Google driving up the price of patents works against them too. It's not as if Motorola doesn't seem what the going rate of Nortel and Interdigital patents are. In fact just last week Motorola said they were open to doing WP phones. That was purely a way to get the last dollar on the selling price.
My point is that Google didn't get AppleSoft to pay all that much since they did it consortium style. And the price Google paid for Motorola was probably higher than it needed to be if Motorola didn't value their patents with respect to prices they saw in the Nortel deal (and they're not stupid enough to have missed it).
http://gigaom.com/2011/08/15/guess-who-else-wanted-to-buy-mo...