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Originally Posted by cloudgazer 
You're making even less sense here than normal. If Google is close to X their final figure then they WANT Rockstar to bury them, because that means Rockstar just overbid and payed far more for the asset than it's worth.
You're making even less sense here than normal. If Google is close to X their final figure then they WANT Rockstar to bury them, because that means Rockstar just overbid and payed far more for the asset than it's worth.
Whoa now brother! That statement is way off any reasonable mark. You are saying that Google is the only one who knows how much those patents are worth? Ridiculous!
The far more likely reason why their group stopped bidding was that it became too expensive FOR THEM. It has nothing to do with anyone else bidding there. Apple's $2 billion might be considered to be a bargain at Apple, and they might be celebrating because they got it so cheaply.
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Why would Google be scared of Apple massively out bidding them? Do you think they get scared by large sums of money? The only fear Google has near X is that Rockstar pulls out. Until you can understand that simple concept I can't help you, in fact I doubt anybody can.
Scared wouldn't be the proper term, concerned might be a better one. If Google was really concerned that they needed those patents, and Apple, MS and others had more money, then Google would feel as though they had to pull out, because if they didn't, and by the way, their partners had something to say about that too, they would be forced to overbid their top position. And the patents are of less value to them, because of their lack of large, direct income, such as Apple has. From the report, they already needed to ask to bid higher, so they already needed to compete against more money than they expected to need.
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Look imagine the absolute simplest possible auction of an Asset X. X is worth A to Apple and G to Google, and in our approximation lets pretend that both parties know both values - let's also assume for convenience that A > G.
Bidding proceeds quickly to G and then gets complex. In principle Google can push Apple all the way to A and it's still in Apple's interest to outbid, but at some point Apple may decide that it's better to let Google overpay, even though they would be leaving value on the table. So even in this scenario where there is perfect knowledge of value there is a sophisticated question as to how far Google bids. It depends on whether Google's loss is Apple's gain and in what proportion, and vice-versa. If you know that final relationship then in our unrealistic approximation then you know the correct value for Google to stop bidding.
Once you introduce real world uncertainties it rapidly gets very complicated.
Bidding proceeds quickly to G and then gets complex. In principle Google can push Apple all the way to A and it's still in Apple's interest to outbid, but at some point Apple may decide that it's better to let Google overpay, even though they would be leaving value on the table. So even in this scenario where there is perfect knowledge of value there is a sophisticated question as to how far Google bids. It depends on whether Google's loss is Apple's gain and in what proportion, and vice-versa. If you know that final relationship then in our unrealistic approximation then you know the correct value for Google to stop bidding.
Once you introduce real world uncertainties it rapidly gets very complicated.
Not only did the group with Apple and MS have more money to bid than Google's final group, but they had what they perceived as a greater need.
Apple alone had the iOS product sales to enforce a much higher bid than Google alone.
So in several years, Apple could be selling close to $100 billion of iOS related products a year, while Google might be making $5 or $6 billion a year on Ads and licensing from Android.
To whom do you think the patents would hold more value? I hope you thought ; Apple.
