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Inside look at $4.5B Nortel patent auction reveals battle of wills between Apple, Google - Page 7

post #241 of 300
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Originally Posted by stelligent View Post

The argument that Goog might have gaming Aapl to bid more than necessary is intriguing, plaausible and insightful; however, if this was truly their strategy, it was flawed. First, they didn't know Apple's limit and could have ended up gaming themselves.

Heh - if you believe the other people on this forum Apple didn't have a limit But over here in sanity land of course you're right. Which I would say is why Google stopped at 4billion, they clearly have the money to go higher, but pushing Apple much higher would risk actually winning. They wouldn't have known Apple's exact limit, but that's all part of the fun. I really don't think Google wanted to win these Patents, using them to protect their Licensees would have required a ton of litigation, and Google doesn't see itself that way.

Quote:
Sure, this could've been a high stake game of chicken, but the ensuing argument would make it unlikely. Even if Apple were to pay the entire $4.5B, it would've done effectively zero long term damage to them. Therefore, the game was all for naught, which I'm sure didn't not escape the sharp minds at the Googleplex.

Earlier I got accused of telling a 'just so story', I wasn't then but I am now. The following theory is entirely speculative and intended to be read with an ISO certified tin foil hat.

<Genuinely Crazy speculation>
Google knew these patents were coming onto the market, they knew that Apple were bidding and they had two choices, bid or don't bid. Not bidding would send a message that they were completely unserious about Android. OEMs might go running to WP7 - so Google has to bid.

Problem for Google is that they really are completely unserious about Android, and they have no desire to spend several billion on it -especially as recouping the money would require them to sue Nokia et al for licensing fees and Google doesn't do IP lawsuits as the plaintiff - it's bad PR. So Google has to bid, but lose.

Problem is losing is bad PR too, and if they drop out too early they'll reap that bad PR and still look unserious about Android. Solution, bid the patents up to a much higher amount than initial expectations, but not so high that Apple will drop out.


Oh and bid in funny amounts, to remind people that while you're a big company, you're a fun big company, so tweak the noses of the suits while winning plaudits from your fanboyz and shoring up morale inside the chocolate factory.
</Genuinely Crazy speculation>

Quote:
In the mind, I think they were simply defeated by the Feigenbaum misunderstanding.

That works too
post #242 of 300
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Originally Posted by stelligent View Post

As for Monty Hall, again an interesting but mixed metaphor. The Monty Hall problem trips up many because they miscount the number of possible eventualities. Here, everyone is simply guessing what machinations were at play. Perhaps none at all. In this guessing game, there's no way of counting all possible outcomes to maximize our odds of being vcorrect.

My point regarding the MHP isn't so much what error people make in that instance, or how you solve it properly - there are probably a number of ways of analyzing either of those, but just that homo sapiens seems to have some fundamental blind spots that are remarkably specific. The MHP is the cognitive equivalent of an optical illusion if you will.

I'm certainly not suggesting that in this case it's the same blindspot, or nearly such a profound one, just a similar instance where people are incredibly certain of something plausibly wrong.
post #243 of 300
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Originally Posted by stelligent View Post

I think they were simply defeated by the Feigenbaum misunderstanding.

That was NOT your idea! http://bit.ly/j09zLB
post #244 of 300
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Originally Posted by cloudgazer View Post

... <Genuinely Crazy speculation>
...
</Genuinely Crazy speculation>...

It's only genuinely crazy compared to your previous posts due to its specificity. Sanity land is not where you are.
post #245 of 300
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Originally Posted by Splash-reverse View Post

I bid through eBay regularly and%2

I'm pretty sure they bid Pi and Brun's constant just to have fun. It's quite likely they knew the direction the bid was going and what it was going to top out at. All the "fun" numbers they bid were well below their max bid. They knew they were going to approach max bid and just had fun before getting there. Nothing wrong with that. I really don't see why people have a problem with that.
post #246 of 300
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Originally Posted by cloudgazer View Post

Does your company have a single competitor in its market and exist in an essentially zero sum context? ie. are you motivated to help them fail at least in this market? I'm guessing not, since that's really quite uncommon.

There are a number of competitors to Google here, as we saw from those bidding. Microsoft is a competitor, and RIm is a competitor. Do you think otherwise? In addition, Nokia will benefit from MS taking the winning side.

Zero sum context? What does that mean?
post #247 of 300
Quote:
Originally Posted by cloudgazer View Post

Heh - if you believe the other people on this forum Apple didn't have a limit But over here in sanity land of course you're right. Which I would say is why Google stopped at 4billion, they clearly have the money to go higher, but pushing Apple much higher would risk actually winning. They wouldn't have known Apple's exact limit, but that's all part of the fun. I really don't think Google wanted to win these Patents, using them to protect their Licensees would have required a ton of litigation, and Google doesn't see itself that way.



Earlier I got accused of telling a 'just so story', I wasn't then but I am now. The following theory is entirely speculative and intended to be read with an ISO certified tin foil hat.

<Genuinely Crazy speculation>
Google knew these patents were coming onto the market, they knew that Apple were bidding and they had two choices, bid or don't bid. Not bidding would send a message that they were completely unserious about Android. OEMs might go running to WP7 - so Google has to bid.

Problem for Google is that they really are completely unserious about Android, and they have no desire to spend several billion on it -especially as recouping the money would require them to sue Nokia et al for licensing fees and Google doesn't do IP lawsuits as the plaintiff - it's bad PR. So Google has to bid, but lose.

Problem is losing is bad PR too, and if they drop out too early they'll reap that bad PR and still look unserious about Android. Solution, bid the patents up to a much higher amount than initial expectations, but not so high that Apple will drop out.


Oh and bid in funny amounts, to remind people that while you're a big company, you're a fun big company, so tweak the noses of the suits while winning plaudits from your fanboyz and shoring up morale inside the chocolate factory.
</Genuinely Crazy speculation>



That works too

Interesting hypothesis. By the way no one here thinks that Apples' bids had no limit, and I'm pretty sure you know that.

As for them not caring about Android. They care, but perhaps not enough.

This is a pretty good idea of what was going on, and the problems for Google as a result:

http://www.informationweek.com/news/...ogle/231000901

Since Google wants a phone, and now tablet OS because they're afraid of losing direct views to its search engine, where it makes almost all of its sales and profits, if Android dies a slow death because of litigation, this could severely hurt Google over the long term. But maybe they've changed their minds about that.
post #248 of 300
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Originally Posted by Jetz View Post

I'm pretty sure they bid Pi and Brun's constant just to have fun. It's quite likely they knew the direction the bid was going and what it was going to top out at. All the "fun" numbers they bid were well below their max bid. They knew they were going to approach max bid and just had fun before getting there. Nothing wrong with that. I really don't see why people have a problem with that.

Hey, I don't think that anyone here wants to deprive those kids of their fun, you know?

But Google is a multi billion dollar business, and their business partners may think differently.
post #249 of 300
Quote:
Originally Posted by melgross View Post

Interesting hypothesis. By the way no one here thinks that Apples' bids had no limit, and I'm pretty sure you know that.

As for them not caring about Android. They care, but perhaps not enough.

This is a pretty good idea of what was going on, and the problems for Google as a result:

http://www.informationweek.com/news/...ogle/231000901

Since Google wants a phone, and now tablet OS because they're afraid of losing direct views to its search engine, where it makes almost all of its sales and profits, if Android dies a slow death because of litigation, this could severely hurt Google over the long term. But maybe they've changed their minds about that.

How in the world can any outside surmise whether Google cares or not, and how much, about anything.

As for the Information Week link giving a good idea of what was going on - actually, the article gives zero idea of what was going on during the auction. It is a compendium of some quotes, speculations and ... speculations by bloggers. LOLOLOLOLOL!
post #250 of 300
Quote:
Originally Posted by melgross View Post

Hey, I don't think that anyone here wants to deprive those kids of their fun, you know?

But Google is a multi billion dollar business, and their business partners may think differently.

Anyone who has truly followed Google, including its partners, knows their affinity for math. The recruitment process involves solving challenging mathematical problems. The company is named after a number. Why would anyone denigrate the company or its future prospects based on this is beyond comprehension. After all, what is so "professional" about bidding exaactly $3B, or $4.5B? And do business partners and developers stay away from Apple because Steve Jobs never changes his shirt?

This is such a case of much ado about nothing. To rationalize this to this extent is frankly, really dumb.
post #251 of 300
Quote:
Originally Posted by melgross View Post

Zero sum context? What does that mean?

A zero sum game is one in which your gain is directly a competitors loss, something like Poker, or a derivative contract. But how do we apply it to a larger context like a market?

Back in the 80s Apple & MS were in a loose zero sum game, only one could come out the winner on the desktop market. Anything that made life harder for MS was good for Apple, even if it didn't directly improve Apple's position.

At some point MS won that game, and then the context changed, though it took a while for either of them to realize it. In the new context Apple's survival helped MS because it gave them protection from the FTC, in the new context Apple had absolutely no hope of reaching a tipping point so there was no material benefit to them in damaging MS.

I'm saying that Android/iOS is much more like Windows/Mac circa 1990 than circa 2005.
post #252 of 300
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Originally Posted by stelligent View Post

Anyone who has truly followed Google, including its partners, knows their affinity for math. The recruitment process involves solving challenging mathematical problems. The company is named after a number. Why would anyone denigrate the company or its future prospects based on this is beyond comprehension. After all, what is so "professional" about bidding exaactly $3B, or $4.5B? And do business partners and developers stay away from Apple because Steve Jobs never changes his shirt?

This is such a case of much ado about nothing. To rationalize this to this extent is frankly, really dumb.

I think people are reacting to the possibility of Google reverting back to the days when there were "no grownups running the company" (their words, not mine). It's the kind of thing that makes investors nervous.

   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

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   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

    AT&T believes their LTE coverage is adequate

Reply
post #253 of 300
Quote:
Originally Posted by stelligent View Post

How in the world can any outside surmise whether Google cares or not, and how much, about anything.

As for the Information Week link giving a good idea of what was going on - actually, the article gives zero idea of what was going on during the auction. It is a compendium of some quotes, speculations and ... speculations by bloggers. LOLOLOLOLOL!

We don't KNOW, in that sense. But we can suspect that their commitment isn't as much as it could be. Those in the industry have been reporting that Google's OEMs are restive over this.

But I can't just blame Google for losing the bid. Where was Samsung, soon to be the worlds largest phone maker? Where was LG, number three, and likely soon to be number two? Where was HTC, on of the largest Android manufacturers? what about Motorola?

All of those companies could have been in on the bidding on Google's side, and together, they could have doubled the groups cash. And why wasn't Sony on their side, and Erricson, both phone manufacturers?

Something isn't right in the land of Google.
post #254 of 300
Quote:
Originally Posted by stelligent View Post

Anyone who has truly followed Google, including its partners, knows their affinity for math. The recruitment process involves solving challenging mathematical problems. The company is named after a number. Why would anyone denigrate the company or its future prospects based on this is beyond comprehension. After all, what is so "professional" about bidding exaactly $3B, or $4.5B? And do business partners and developers stay away from Apple because Steve Jobs never changes his shirt?

This is such a case of much ado about nothing. To rationalize this to this extent is frankly, really dumb.

I'm not impressed with their math. I took two years of calculous and four years of physics, but I would never bid in such a man nor, no do I know anyone else who would. If they're trying to prove some obscure point by doing so, it fell flat. It doesn't matter if a few goofballs in the blogosphere are jumping up and down with thrills. This is a hard business situation, and when you run a company, your in it to win what you can, and even up on everything else.

So don't tell us how much you've "followed" them. It's irrelevant.
post #255 of 300
Quote:
Originally Posted by cloudgazer View Post

A zero sum game is one in which your gain is directly a competitors loss, something like Poker, or a derivative contract. But how do we apply it to a larger context like a market?

Back in the 80s Apple & MS were in a loose zero sum game, only one could come out the winner on the desktop market. Anything that made life harder for MS was good for Apple, even if it didn't directly improve Apple's position.

At some point MS won that game, and then the context changed, though it took a while for either of them to realize it. In the new context Apple's survival helped MS because it gave them protection from the FTC, in the new context Apple had absolutely no hope of reaching a tipping point so there was no material benefit to them in damaging MS.

I'm saying that Android/iOS is much more like Windows/Mac circa 1990 than circa 2005.

I know what a zero sum game is. I just don't see how it applies to this. But it means that wins and losses cancel out. I don't see how that's happening here. This is a game that's not nearly over yet. So we might compare it to a war, and Apple's side won this battle. But in a wat, the side with the most arms, the most technology, AND the best strategy usually wins.

There may be reverses along the way, but long term, the results can be very different. Remember, the North lost the battle of Bull Run. And the Allies lost France.
post #256 of 300
Quote:
Originally Posted by melgross View Post

I'm not impressed with their math. I took two years of calculous and four years of physics, but I would never bid in such a man nor, no do I know anyone else who would. If they're trying to prove some obscure point by doing so, it fell flat. It doesn't matter if a few goofballs in the blogosphere are jumping up and down with thrills. This is a hard business situation, and when you run a company, your in it to win what you can, and even up on everything else.

So don't tell us how much you've "followed" them. It's irrelevant.

Following a company and having insight into them isn't irrelevant if this is part of the corporate culture. People claim that for Apple all the time and bidding like that seems to be very much in Google's cultural DNA.

That some folks have no sense of humor isn't Google's problem and there's no real difference between bidding 3.141592B and 3B (well other than the 142M if you would have won with 3B).
post #257 of 300
Quote:
Originally Posted by melgross View Post

I know what a zero sum game is. I just don't see how it applies to this.

The most obvious way that it applies to this is perception. People are not reporting or discussing this purely as a win for Apple, they are also talking of this as a loss for Google - in fact I'd say they're PRIMARILY discussing this as a loss for Google.

At the end of the day it comes down to this. You really think that when Sergei, Larry & Eric all sat down to discuss how they were going to bid on this high profile auction that at no time did they discuss whether to try to make Apple pay more than necessary if it became clear that Apple was going to outbid them. I think they almost certainly did.
post #258 of 300
Quote:
Originally Posted by cloudgazer View Post

The most obvious way that it applies to this is perception. People are not reporting or discussing this purely as a win for Apple, they are also talking of this as a loss for Google - in fact I'd say they're PRIMARILY discussing this as a loss for Google.

At the end of the day it comes down to this. You really think that when Sergei, Larry & Eric all sat down to discuss how they were going to bid on this high profile auction that at no time did they discuss whether to try to make Apple pay more than necessary if it became clear that Apple was going to outbid them. I think they almost certainly did.

Yes, but to portray this as their original intent is called "spin".

If Google didn't care to win but simply make others pay more they'd have done as they did in the spectrum bid. Make a max bid low enough that they can live with the win but high enough that it costs the other guys pain.

Like what Intel did. $1.5B for the patents would have been nice if Intel won but really, does Intel have a competitive horse in the LTE handset race? Enough to bid much more than $1.5B? Not so much but all those guys building ARM devices must be annoying them a bit so peeing in their collective cheerios has some amusement factor. Especially Microsoft. Yeah, port windows to ARM...here's a little love tap byatchas.

So the interesting thing in this story isn't how Google bid or how much Apple paid (not that much given their share is only $2Bish) but exactly what Google promised Intel to join Team Ranger.

If I were Otellini my $1.5B pound of flesh would have been to demand, win or lose, Google really pushes a premier Oak Trail based Honeycomb tablet. Say for example that the next Google I/O giveaway isn't an ARM based tablet but a Lenovo Oak Trail business tablet with direct Google involvement and extra bonus Google Apps features designed for the "more powerful Intel SOC".

Intel wants to defend that space badly and that's something that Google was well positioned to offer vs Apple.

Given that Google was willing to go around $2.5B for the patents means that they really wanted to win. They lost and it didn't cost their competitors individually as much as what is likely Google's part of the final Team Ranger bid. Trying to sell that loss as some kind of Machiavellian Grand Strategy requires more RDF mojo than any Google apologist can muster.

They sure as hell aren't playing the Android game to lose and this loss is IMHO just as significant if not more than Apple's loss of AdMob to Google but bit shy of RIM's loss of Palm to HP (probably a company killer). Google is so weak in patents that they really needed these patents or they are going to continued to get hammered on IP. This is why this is seen as a major loss for Google.
post #259 of 300
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Originally Posted by nht View Post

Following a company and having insight into them isn't irrelevant if this is part of the corporate culture. People claim that for Apple all the time and bidding like that seems to be very much in Google's cultural DNA.

That some folks have no sense of humor isn't Google's problem and there's no real difference between bidding 3.141592B and 3B (well other than the 142M if you would have won with 3B).

It still doesn't matter. If the guys at Google are in their office laughing at their big prank, it says something that's no good about their corporate culture at the top, and perhaps Schmitt should come back as CEO.

If business partners don't take you as seriously as you need them to, then it's a strong negative. If they start questioning your motives and seriousness, then they will be less inclined to do business with you.
post #260 of 300
Quote:
Originally Posted by cloudgazer View Post

The most obvious way that it applies to this is perception. People are not reporting or discussing this purely as a win for Apple, they are also talking of this as a loss for Google - in fact I'd say they're PRIMARILY discussing this as a loss for Google.

At the end of the day it comes down to this. You really think that when Sergei, Larry & Eric all sat down to discuss how they were going to bid on this high profile auction that at no time did they discuss whether to try to make Apple pay more than necessary if it became clear that Apple was going to outbid them. I think they almost certainly did.

I don't think that anything they MAY have discussed about making Apple pay more than they would have is relevant. We don't know if they discussed that or not, and it would be a very strange discussion. What you discuss is how to win the bidding. It's very dangerous to assume that your opponent will always outbid you. If Google bid more than they wanted to in order to force Apple to bid more, then what? Do you think that Apple, who has quite a bit more money than Google, would be financially hurt by a few hundred million more, if indeed that did happen?

And what if Google was wrong, and ended up paying hundreds of millions more themselves? It would have backfired if they didn't think that price was worth it. I think we can safely put that argument to rest.

A zero sum game means not just a balance in that someone comes out positive, and someone comes out negative. It means that they do so in mirror fashion, that is, in this case, that Google loses as much as Apple gains. I don't know how we can define that. We may not be able to for years to come.

This may have been a more serious loss for Google than a gain for Apple, or less of a loss for Google than a gain for Apple. who knows?

And in the middle of this, Microsoft is making big strides in persuading Android makers to pay them big sums for every Android device they make. This is without the patents secured by Apple's group, which includes MS. MS is far more aggressive than Apple, despite all the publicity over Apple led lawsuits.

If MS is getting between $10 and the $15 per phone they've been demanding, that’s not good for Android makers, and not good for Google. While it may not seem like much, with Apple sucking 50% of all the profits out of the cell phone industry, that leaves little for other manufacturers. And it's worse than it seems, because companies like Samsung, Nokia and LG make hundreds of phone models, whereas Apple has one new one, and an old model out there.

So if Samsung has all those phone models, the small percentage of profit they're making on them will be severely impacted by the payment of another $10 per phone to MS. If this patent loss for Google adds more weight to MS's arguments, these demands could go higher. And if Apple were to begin demanding licensing fees as well, the whole house of cards could collapse.

This could be a reason why Samsung is negotiating for the use of WebOS with HP. If Android costs rise too high, and they produce WebOS phones and tablets, and they begin to take off, their reliance on Android would be less, and possibly, they would cut back in new Android phone design and production.

We could be seeing the handwriting on the wall here. Google has stated that they will be looking for other opportunities for IP. Whether they're successful or not could reshape the phone industry yet again. But, as I've been saying, the fallout from this might not be seen for a few years.
post #261 of 300
Quote:
Originally Posted by melgross View Post

It still doesn't matter. If the guys at Google are in their office laughing at their big prank, it says something that's no good about their corporate culture at the top, and perhaps Schmitt should come back as CEO.

If business partners don't take you as seriously as you need them to, then it's a strong negative. If they start questioning your motives and seriousness, then they will be less inclined to do business with you.

Any "business partner" that doesn't take a company that can bid $3.14B seriously is an idiot.

Any "business partner" that questions the motive of a company that can bid $3.14B on something is an idiot.

Bidding $3.14B is not a "big prank" and anyone deciding not to do business with Google over a mildly humorous math bids is a complete f-ing idiot. At the end of the day they bid through $4B and there's a point where these patents are simply overpriced and not worth pursuing.

The mathematical bidding didn't faze Intel and you're blowing up something that is either neutral or slightly positive into some wierd huge negative for Google.

You'll have to provide links that OEMs are "restive" over Google's math bids because there's no indication of that in what I've read. There was some when Schmidt moved to Chairman but Page has a decade under his wing and frankly I don't see that Schmidt wouldn't have made those same bids. In any event it's better than overpaying for YouTube by about a billion dollars.
post #262 of 300
Quote:
Originally Posted by melgross View Post

This may have been a more serious loss for Google than a gain for Apple, or less of a loss for Google than a gain for Apple. who knows?

And in the middle of this, Microsoft is making big strides in persuading Android makers to pay them big sums for every Android device they make. This is without the patents secured by Apple's group, which includes MS. MS is far more aggressive than Apple, despite all the publicity over Apple led lawsuits.

Meh...I would guess most of the LTE/4G patents are likely required to be available via FRAND. Licensing of these are not likely to be game changing for Android.

The remainder, however, are meant to be used as offensive weapons. Had they not been then RPX would have found a partner in either Ranger or Rockstar. So even GOOG didn't view them as strictly defensive patents regardless of their public statements.
post #263 of 300
Quote:
Originally Posted by nht View Post

Any "business partner" that doesn't take a company that can bid $3.14B seriously is an idiot.

Any "business partner" that questions the motive of a company that can bid $3.14B on something is an idiot.

Bidding $3.14B is not a "big prank" and anyone deciding not to do business with Google over a mildly humorous math bids is a complete f-ing idiot. ...

You don't take someone seriously just because they are throwing money around. Plenty of drunken fools and now bankrupt lottery winners have done that. Google's bidding was "high school" clever.
post #264 of 300
Quote:
Originally Posted by melgross View Post

It's very dangerous to assume that your opponent will always outbid you.

Not very dangerous, insane. If you assume they'll always outbid you, you can push them to 80billion. I have never suggested that Apple would always outbid Google, unlike say island_hermit - who did, more than once. I'm the guy who spent much of the thread trying to explain to people that Apple had a limit that was a lot closer to 5 billion than it was to 80, so yes thanks for agreeing with me on that one.

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If Google bid more than they wanted to in order to force Apple to bid more, then what? Do you think that Apple, who has quite a bit more money than Google, would be financially hurt by a few hundred million more, if indeed that did happen?

A billion here, a billion there, sooner or later you add up to some real money. The idea that Apple doesn't care about overpaying by a few hundred million is ridiculous, they do. The patents were by your analysis worth 4 billion to Ranger, do you think Google can't afford to lose a few more hundred million on top? Of course they can, they just don't want to. Can't you see how bizarre your worldview is here? You are essentially saying that it completely wouldn't matter if Apple overpayed by 500mil but it would be terrible if Google overpaid by 500mil? Really?

Quote:
And what if Google was wrong, and ended up paying hundreds of millions more themselves? It would have backfired if they didn't think that price was worth it. I think we can safely put that argument to rest.

Suppose Apple believe that there is no possibility that Google will overbid, as you apparently do. Apple also believe that the patents must be more valuable to Apple than they are to Google, as you also do. Therefore Apple must always outbid Google, which you have said is an unreasonable assumption. Something here clearly isn't right, and it's the assumption that you should never overbid.

Game theory is full of cases where you must be willing to occasionally run an outsized risk in order to maximize your overall chances. The classic example is 'fighters & bombers'. Even though attacking from the sun is the safest approach for the fighter, if fighters ALWAYS do it they reduce their overall survival rate below optimal- sometimes you must attack from the risky direction in order to maximize safety.

Another less formal example is Poker, bluffing is clearly risky, but never bluffing is unlikely to be optimal. Bluffing allows you to potentially win with a bad hand, a double bluff allows you to potentially win more than otherwise with a good hand. A player who never ever bluffs is entirely predictable. A player who never bluffs and doesn't believe that any other player ever bluffs because they think bluffing is illogical is somebody I'd like to play against.

SImilarly overbidding may allow you to 'win' in an auction where the asset has relatively low value to you by making your competitor overpay, the equivalent of a double bluff may allow you to 'win' an auction by acquiring the asset for less than its worth to you, by convincing your competitor you are overbidding. I'm scarequoting 'win' here to indicate I'm talking about winning the game, not just winning the asset.

Quote:
A zero sum game means not just a balance in that someone comes out positive, and someone comes out negative. It means that they do so in mirror fashion, that is, in this case, that Google loses as much as Apple gains. I don't know how we can define that. We may not be able to for years to come.

Which is exactly why I originally said zero-sum context, and not zero sum-game. Ok, to make you happy let me put it more precisely. I am stipulating that Google's score and Apple's score are inversely related. You are apparently assuming that the underbidder's score is zero and the asset winner's is Bid-Value, though Value of course may only be known in hindsight.

As to MS, it's really unclear what is going to happen. Are they content to become a patent troll under the smartphone bridge? Will they keep pushing WP7? If it fails will they push Windows 8? Are consumers interested at all? There seems a shocking lack of interest in both WP7 and WebOS from consumers. I guess we'll find out if WP7 has any legs at all when Nokia starts to kick out models.

As to Samsung and WebOS, I don't think that would be a defensive play regarding MS. The logical defensive play there would be to jump to WP7, which is what MS is no doubt angling for, and probably offering reduced license terms for OEMs that do. WebOS seems more likely a poke on Google's nose to try to get them to partner more closely with Samsung. As I understand it, each Android revision gets launched on an exclusive with a partner, and these deals are extremely lucrative in both cash and marketshare.
post #265 of 300
Quote:
Originally Posted by nht View Post

So the interesting thing in this story isn't how Google bid or how much Apple paid (not that much given their share is only $2Bish) but exactly what Google promised Intel to join Team Ranger.

There are lots of interesting questions really. What exactly did Google intend if it won, what exactly did Intel, what do Apple intend, what did MS & Sony actually get? Why did Intel side with Google. Why did RIM side with Apple? Much of this we'll just never know, though presumably Apple's intentions will become clear in time.

Quote:
They sure as hell aren't playing the Android game to lose and this loss is IMHO just as significant if not more than Apple's loss of AdMob to Google but bit shy of RIM's loss of Palm to HP (probably a company killer). Google is so weak in patents that they really needed these patents or they are going to continued to get hammered on IP. This is why this is seen as a major loss for Google.

Google doesn't want Android to lose to WP7, I think they can live with it losing to Apple. Apple's loss of AdMob seemed bad at the time, but the way that iAds sits badly with them makes it seem almost a lucky break - ultimately Apple may well decide to get out of the advertising game completely, either that or they have to start thinking of advertisers as their customers and of consumers as product.
post #266 of 300
Quote:
Originally Posted by cloudgazer View Post

... SImilarly overbidding may allow you to 'win' in an auction where the asset has relatively low value to you by making your competitor overpay, the equivalent of a double bluff may allow you to 'win' an auction by acquiring the asset for less than its worth to you, by convincing your competitor you are overbidding. I'm scarequoting 'win' here to indicate I'm talking about winning the game, not just winning the asset. ...

Yes, we know your agenda is to convince us that Google is very clever, that the real "game" was to make Apple "overpay" for these patents, that Google "won" even though they lost: to spin Google's loss of these patents as a victory for them: to spin this as a pyrrhic victory for Apple.

The only problem is that you haven't actually presented any evidence* to support your spin. No evidence that Google's real goal at any point was to force someone else to overbid. No evidence that the bids actually exceed the value of the patents. No evidence at all of anything.

Instead, you offer an elaborate "conspiracy theory" tale sprinkled with some loose talk about game theory and how smart they are at Google.

The truth is that loosing these patents hurts Google much more than getting someone else to overpay by what is in fact chump change to them could possibly help them. So, no matter how you try to spin it, Google lost and they lost spectacularly, and looked like a bunch of high school nerds doing it.


* EDIT: and by 'evidence' I mean "even a slightly plausible argument". In fact, you haven't presented any sort of argument at all.
post #267 of 300
Quote:
Originally Posted by anonymouse View Post

. . . no matter how you try to spin it, Google lost and they lost spectacularly, and looked like a bunch of high school nerds doing it.

By that reasoning, would you say that if Google had bid $5B and Rockstar then bowed out, that Google had won spectacularly? Or would you then have said Apple forced them to spectacularly overpay? I'm pretty sure I already know what answer you would have given.

There was a whole bunch of smart guys involved on all sides with a lot more information on what those patents might actually give them, as well as what other business interests and decisions had already been made. Compare that to a few guys in a forum making uneducated guesses this early after the game making factual statements on who won or lost?

No members judgement of the results is any more valid than anyone else's IMHO. It may well be years, if ever, before hindsight reveals if Apple/Rockstar wildly overpaid, stole the auction, or just simply got a reasonable return for the investment.
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post #268 of 300
Quote:
Originally Posted by anonymouse View Post

You don't take someone seriously just because they are throwing money around. Plenty of drunken fools and now bankrupt lottery winners have done that. Google's bidding was "high school" clever.

Anyone not taking google seriously is an idiot...I don't care if they are bidding mathematical constants or not. Google isn't always successful but they are very sharp competitors with very good top management.

Apple won this round for sure but you guys are petty fans even in victory by taking one very minor aspect and blowing it up to be some huge indicator of Google competence.
post #269 of 300
Quote:
Originally Posted by anonymouse View Post

Yes, we know your agenda is to convince us that Google is very clever, that the real "game" was to make Apple "overpay" for these patents, that Google "won" even though they lost: to spin Google's loss of these patents as a victory for them: to spin this as a pyrrhic victory for Apple.

No, my agenda is to try to get it through to people who should be intelligent enough to understand it that their analysis is grossly oversimplified. I have no idea who 'won' the auction, moreover unlike you I am happy to admit it.

You are the ones with certainty that lacks evidence, I'm the one presenting the case that this issue is nuanced.[/QUOTE]
post #270 of 300
Quote:
Originally Posted by Gatorguy View Post

By that reasoning, would you say that if Google had bid $5B and Rockstar then bowed out, that Google had won spectacularly? Or would you then have said Apple forced them to spectacularly overpay? I'm pretty sure I already know what answer you would have given.

Please link where I stated categorically that Apple has overpaid, rather than simply stating that Apple may have overpaid, or that Google may have overbid to push Apple higher than they might have expected to pay. I realize that the subjunctive mood is no longer taught in school but you should all still be able to perceive the difference.

Take your time. Scroll back, in fact if you read through the thread you'll find the post where I point out that Apple almost certainly has not overpaid unless the royalties are extremely low.
post #271 of 300
Quote:
Originally Posted by cloudgazer View Post

Please link where I stated categorically that Apple has overpaid, rather than simply stating that Apple may have overpaid. I realize that the subjunctive mood is no longer taught in school but you should all still be able to perceive the difference.

Take your time. Scroll back, in fact if you read through the thread you'll find the post where I point out that Apple almost certainly has not overpaid unless the royalties are extremely low.

I don't believe you've stated that Apple did overpay. Nor was the section of my quoted post directed at you Cloudgazer.
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post #272 of 300
Quote:
Originally Posted by Gatorguy View Post

I don't believe you've stated that Apple did overpay. Nor was the section of my quoted post directed at you Cloudgazer.

Oh - fair nuff then - :-)

I'm so used to being the punching bag in this thread it threw me that you were aiming your arrows at somebody else
post #273 of 300
Quote:
Originally Posted by Gatorguy View Post

By that reasoning, would you say that if Google had bid $5B and Rockstar then bowed out, that Google had won spectacularly? Or would you then have said Apple forced them to spectacularly overpay? I'm pretty sure I already know what answer you would have given.

As usual, your question spectacularly misrepresents what I said. You know that, and you are simply engaging in more of the dishonesty for which you've come to be known on this forum.
post #274 of 300
Quote:
Originally Posted by cloudgazer View Post

No, my agenda is to try to get it through to people who should be intelligent enough to understand it that their analysis is grossly oversimplified. I have no idea who 'won' the auction, moreover unlike you I am happy to admit it.

You are the ones with certainty that lacks evidence, I'm the one presenting the case that this issue is nuanced.

You haven't actually presented any case that the situation is nuanced. What you've actually done is attempt to portray a fantasy scenario that assumes it was.
post #275 of 300
Quote:
Originally Posted by anonymouse View Post

As usual, your question spectacularly misrepresents what I said. You know that, and you are simply engaging in more of the dishonesty for which you've come to be known on this forum.


I simply asked you a question, rather than stating you said something that you did not. As is becoming all too common, you're avoiding an answer again, something for which you've become known on this forum.
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post #276 of 300
Quote:
Originally Posted by anonymouse View Post

You haven't actually presented any case that the situation is nuanced. What you've actually done is attempt to portray a fantasy scenario that assumes it was.

I just posted several detail paragraphs presenting my case. You presented a strawman. and I'm the guy with no case?

Sorry to break it to you but I have a case, you just don't like it. You on other hand have beliefs, approaching the religious level, which presumably explains your righteous anger that I fail to share them.
post #277 of 300
Quote:
Originally Posted by nht View Post

Any "business partner" that doesn't take a company that can bid $3.14B seriously is an idiot.

Any "business partner" that questions the motive of a company that can bid $3.14B on something is an idiot.

Bidding $3.14B is not a "big prank" and anyone deciding not to do business with Google over a mildly humorous math bids is a complete f-ing idiot. At the end of the day they bid through $4B and there's a point where these patents are simply overpriced and not worth pursuing.

The mathematical bidding didn't faze Intel and you're blowing up something that is either neutral or slightly positive into some wierd huge negative for Google.

You'll have to provide links that OEMs are "restive" over Google's math bids because there's no indication of that in what I've read. There was some when Schmidt moved to Chairman but Page has a decade under his wing and frankly I don't see that Schmidt wouldn't have made those same bids. In any event it's better than overpaying for YouTube by about a billion dollars.

No. If you can't understand what a company is up to, you try to avoid doing the kind of business with them that will lock you to them. That doesn't mean selling or buying from them. It doesn't mean paying them for Advertising. But it can mean continuing to license an OS that may end up costing you more than you will make from it. This is something we may already be seeing with Samsung's negotiation with HP over the use of WebOS.

With Google refusing to back their OEM's over licensing feuds, either with legal help, or indemnifying them, how can these companies think Google is serious enough? At some poi t in time, they will decide that Google just doesn't care enough to spend their own money on this, and therefor, why should they?

When IBM was sued by SCO, they indemnified their customers, and so proved they would back them up no matter what happened. This is what serious companies do.

No matter what you say, with these odd bids, and then the refusal to go all the way on it, and with no indication of indemnification against lawuits, and threatened lawsuits, such as MS's, which MS is winning right and left, companies may decide to throw in the towel.

No matter how much product you are selling, if you can't profit on it, smart executives will drop the line. With Apple making 50% of the profits on the cell manufacturing industry, and with that percentage undoubtedly going higher, there are little profits for everyone else. A $10 to $15 fee on all smartphones sold going to MS could end the free ride these companies are now getting. And if Apple should somehow decide to ask for fees as well, that could drive these companies over the edge.

I've always thought that if you violate someone's IP, you should have to pay for it, even if your product is free. If you can't innovate without using other's work, then you haven't innovated at all.
post #278 of 300
Quote:
Originally Posted by nht View Post

Meh...I would guess most of the LTE/4G patents are likely required to be available via FRAND. Licensing of these are not likely to be game changing for Android.

The remainder, however, are meant to be used as offensive weapons. Had they not been then RPX would have found a partner in either Ranger or Rockstar. So even GOOG didn't view them as strictly defensive patents regardless of their public statements.

FRAND is not an automatic payment machine. Usually, the companies with the patents declare FRAND themselves, to force others to pay up. Sometimes, as with Apple now, they've got some patents that others desperately want to license, and that a company doesn't want to license, so those others attempt to declare FRAND, but it doesn't always work. I know of a lot of patents over the decades in various industries that were considered to be indispensable, but weren't licensed by the holders. In fact most patents are considered to be indispensable, but aren't licensed.
post #279 of 300
Quote:
Originally Posted by cloudgazer View Post


A billion here, a billion there, sooner or later you add up to some real money. The idea that Apple doesn't care about overpaying by a few hundred million is ridiculous, they do. The patents were by your analysis worth 4 billion to Ranger, do you think Google can't afford to lose a few more hundred million on top? Of course they can, they just don't want to. Can't you see how bizarre your worldview is here? You are essentially saying that it completely wouldn't matter if Apple overpayed by 500mil but it would be terrible if Google overpaid by 500mil? Really?

The error you keep making is in assuming that Apple would be overpaying. You don't know what this is worth to Apple or anyone else. It could be that it was worth much more to Google as well, but that they decided they couldn't afford it. It could be that Apple, who only paid $2 billion could have gone to $4 billion, or more. You don't know, so you should just stop talking about overpaying, because that's just your assumption.

You talk about worldview, but yours is from Mars. You have no logic to what you're stating. You're making up things from what you want to believe, and taking it from there. You are ignoring all the realities.

You keep insisting that only Google knows how much these patents are worth. It's just as likely that they have no idea as to how much they are worth. I'm not saying how much they were worth to Ranger, only that that was all they could spend. Other than that, we know nothing, but you seem to be insisting that you do.

You keep insisting that anything over Google's bid is over paying. why is that? Why do you assume that Google is so smart that only they know what they're doing? I happen to think that Google has been very stupid in all of this. I also believe that they are very worried about Android, and that they're trying to hedge their bets by backing this silly Chromebook initiative.

Google is a very strange company, and you can't trust what they say. Now, they're talking about how sad this whole thing is after losing. They are also making statements, at least Schmitt is, about how bad this is for open software and how these other companies aren't innovating, just relying on their IP, unlike Google, which by the way, he states will be looking for more IP. How convoluted and hypocritical is that?

He's basically stating that Google is using others innovations and IP in their products, and that therefor Google is innovative, even though it's the others who have done the inventing that Google is using, and oh, by the way, we're still looking for IP to buy, you know, just like those others they're whining about. I mean, really, give me a break!

Quote:
Suppose Apple believe that there is no possibility that Google will overbid, as you apparently do. Apple also believe that the patents must be more valuable to Apple than they are to Google, as you also do. Therefore Apple must always outbid Google, which you have said is an unreasonable assumption. Something here clearly isn't right, and it's the assumption that you should never overbid.

You keep putting words in my mouth. I never said that Google wouldn't over bid. I also never said that they would. At least, not intentionally. This is what YOU are saying. You've been stating that from the beginning. You keep saying that Google could have bid higher than they wanted to pay in order to get Apple to pay more. I'm not stating anything of the kind.

I'm just attempting to respond to you obviously fallacious arguments where you state that.

You have an amazing ability to take what others say, and twist it around so that it bears no relation to it, and to then build up an argument that therefor has nothing to do with what that other said, but that somehow seems to support your own odd argument, which it wouldn't if you didn't misinterpret the original statement the other said, in these cases, me.

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Game theory is full of cases where you must be willing to occasionally run an outsized risk in order to maximize your overall chances. The classic example is 'fighters & bombers'. Even though attacking from the sun is the safest approach for the fighter, if fighters ALWAYS do it they reduce their overall survival rate below optimal- sometimes you must attack from the risky direction in order to maximize safety.

Another less formal example is Poker, bluffing is clearly risky, but never bluffing is unlikely to be optimal. Bluffing allows you to potentially win with a bad hand, a double bluff allows you to potentially win more than otherwise with a good hand. A player who never ever bluffs is entirely predictable. A player who never bluffs and doesn't believe that any other player ever bluffs because they think bluffing is illogical is somebody I'd like to play against.

SImilarly overbidding may allow you to 'win' in an auction where the asset has relatively low value to you by making your competitor overpay, the equivalent of a double bluff may allow you to 'win' an auction by acquiring the asset for less than its worth to you, by convincing your competitor you are overbidding. I'm scarequoting 'win' here to indicate I'm talking about winning the game, not just winning the asset.

I can go looking around the web and come up with links too. But you have to understand the situation, which you clearly do not. You can state game theory all you want to, but it's easy to see that your use of it is superficial. Game theory is very interesting in a general sense, but each individual case is different, and unique.

In any case, it comes down to several things. How much is this worth to us? How much can we afford? How much is it worth to keep out of the hands of a hostile competitor, etc. In the heat of an actual auction, these questions are much more important than theoretical musings.

You look to future sales, and how they could be impacted several ways. Yu look to future profits and how they can be impacted several ways. You look to what this means in terms of marketshare, and how that impacts sales and profits. It's a balancing act, and something arch company must do on it's own. That's why each company paid differing amounts, and for differing parts of the portfolio, as well as to access to other parts.

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Which is exactly why I originally said zero-sum context, and not zero sum-game. Ok, to make you happy let me put it more precisely. I am stipulating that Google's score and Apple's score are inversely related. You are apparently assuming that the underbidder's score is zero and the asset winner's is Bid-Value, though Value of course may only be known in hindsight.

There is no such thing as zero sum context. Either it is or it isn't. Here, one side won, and the other lost. There is no zero sum anything. There is no current way to evaluate it. It will take years.

Quote:
As to MS, it's really unclear what is going to happen. Are they content to become a patent troll under the smartphone bridge? Will they keep pushing WP7? If it fails will they push Windows 8? Are consumers interested at all? There seems a shocking lack of interest in both WP7 and WebOS from consumers. I guess we'll find out if WP7 has any legs at all when Nokia starts to kick out models.

Posters love to call every company that has IP, and attempts to get paid for it, a patent troll, but that's just silly. There are hundreds of thousands of patents, if not millions, that are licensed out. Is IBM a patent troll because they receive billions every year in patent fees? Of course not! Neither are most of the other thousands of companies and individuals who invent something, and are getting fees for it.

So is MS a patent troll? Not really. They've invented much themselves, And buying more patents doesn't make them trolls. If someone invents something, no one else has the right to take it and use it without paying for it, assuming that the invention is valid, which most, but not all are.

If I invent something, and patent it, but can't get the money to make it, and can't convince other companies to do so, and then find that someone Is making it without coming to me for a license, and I sue, am I a patent troll? Of course not! But this happens all the time. And often, companies invent many things in the course of their R&D, but decide that they don't need them now. Does that mean that another company should can steal that IP for themselves? Again, of course not.

Quote:
As to Samsung and WebOS, I don't think that would be a defensive play regarding MS. The logical defensive play there would be to jump to WP7, which is what MS is no doubt angling for, and probably offering reduced license terms for OEMs that do. WebOS seems more likely a poke on Google's nose to try to get them to partner more closely with Samsung. As I understand it, each Android revision gets launched on an exclusive with a partner, and these deals are extremely lucrative in both cash and marketshare.

I knew that wouldn't think so, but your response makes even less sense. Dealing with HP could be a counterweight to both MS, Google, and of course, Apple. We also don't know what HP might be asking for fees. I suspect, though of course it's just my take, that HP would be asking for less than MS is demanding. Hp announced some time ago that WebOS would be offered for licensing, and people laughed, think that no one would be interested, because of its tiny take-up. But perhaps they were wrong.

As for Samsung dealing with MS to make WP7 phones, and so getting a better deal than the $15 MS is demanding, well... Samsung ALREADY makes WP7 phones, for your information, and still, they're being smacked down by MS.
post #280 of 300
Quote:
Originally Posted by Gatorguy View Post

By that reasoning, would you say that if Google had bid $5B and Rockstar then bowed out, that Google had won spectacularly? Or would you then have said Apple forced them to spectacularly overpay? I'm pretty sure I already know what answer you would have given.

There was a whole bunch of smart guys involved on all sides with a lot more information on what those patents might actually give them, as well as what other business interests and decisions had already been made. Compare that to a few guys in a forum making uneducated guesses this early after the game making factual statements on who won or lost?

No members judgement of the results is any more valid than anyone else's IMHO. It may well be years, if ever, before hindsight reveals if Apple/Rockstar wildly overpaid, stole the auction, or just simply got a reasonable return for the investment.

We now have information supplied by the Canadian court documents on this that the Canadian government is using in its review. This give us a much more detailed view of what went on. The article give us some of the highlights:

http://techcrunch.com/2011/07/09/vesper/
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