Yes because despite the losses, they were still growing. So now that they won't be continually losing money from the Motorola division, the stock went up.
Losing billions of dollars never affects your stock price? Ever? It allows to grow your market cap 200%?
I need to lose more money.
Yeah they have other ventures but continually losing money and having a sell off throwing away multiple quarters of profit is not good business. That's what started getting Microsoft into trouble thinking they're untouchable.
In buying Motorola Google wanted to replicate Apple's model as being the maker of both the software and hardware. This has proved an expensive failure simply because they are NOT Apple! It follows that Microsoft will have the same fate with its Nokia marriage.
In buying Motorola Google wanted to replicate Apple's model as being the maker of both the software and hardware. This has proved an expensive failure simply because they are NOT Apple! It follows that Microsoft will have the same fate with its Nokia marriage.
Unlikely. They could never have given gotten serious about hardware without pissing off major partners. It's been quoted in various places that the Motorola acquisition was mainly a patent buy. And it seems that Google is keeping most of those patents.
Thinking up a manufacturing process and then actually, you know, *making it* in China is not remotely the same as *actually* making it in the United States.
Can you explain why? For example, if you look at manufacturing they have in Europe (since labor costs are through the roof there), the entire process is automated with only one person touching the product. Clearly the costs are all in the tooling and process.
Also consider Dell. The only thing they did when they manufactured in US is to install the software (completely automated) and add RAM and hard drives. The motherboards, for example, were built in China, and installed into a Chinese made chassis in China. However, it still qualified as US made.
Well, starting with your $5,400,000,000 number, you left out that the purchase price included operating losses that Motorola had already incurred as Motorola... This was money spent by Motorola, not Google, that Google got to write off after the acquisition. $1,000,000,000 domestically and $700,000,000 internationally. So another $1.7bil lopped off.... down to $3.7billion- and there were additional breaks that were expected to continue on to the tune of $700million/yr until 2019 according to Forbes... so when you factor that in the losses (if any) get pretty small pretty quick, especially since they still hold the patents they deem useful to themselves.
I don't think Moto Mobile was a 'win' for Google by any stretch, but the exuberant schadenfreude most of the avid Google haters really isn't all that warranted.
To me I'm just a little sad that the inventor of the mobile phone and the only smartphone designed and made in the US is gone =(
That's not right. When Google wrote off the $1.7B in losses, they only gained the taxes that would have been paid on $1.7B. The write off is deducted from any profit before taxes. Google did not write off $1.7B from the taxes they had to pay. So Google did not gain $1.7B from the write off, more like about $450M. (based on a 25% tax rate)
That is, unless you meant that Google actually gained $1.7B from a tax write off of around $7B.
Guys, stop ranting. Google has not lost money here. Not one cent. And I don't mean in a hypothetical sense, in a real world accounting sense.
Back when the Motorola acquisition was made, Google was facing three major threats to Android. Whole world was focussing on the threat from Apple law suits and Oracle law suits. The whole world was looking at how Motorola could help Google dealing with these law suits. It couldn't and it didn't, despite a lot of effort by Google.
But the biggest threat to Android was not from outside - it was from within the Android camp. Samsung was gaining a lot of clout and it was the ONLY player making money on Android. Not even Google itself was/is making money on Android.
Google was obviously worried about the growing clout of Samsung, and wanted to retain some control of Android.
With the recent Samsung cross licensing deal, and with the term being set as 10 years, Google has eliminated the internal threat to Android. So Motorola at least helped Google in some way.
But more importantly the amount Samsung agreed to pay upfront and over the years, more than makes up for the losses on Motorola. All Google had to do was set the duration of the cross licensing to as high a number as it was required, to make it attractive enough to Samsung, that Samsung would pay whatever it was that Google lost on Motorola. And it is clear that the number was 10 years.
The stock is going up today, simply because a loss making company is off Google's neck, and they have managed to do this without any impact to bottom line.
There isn't going to be a big wirite off this quarter.
I couldn't agree more. Google saw two advantages to the puchase: patents for at least the appearance of defending Android, and a manufacturing arm to influence their hardware market.
I suspect Google was using their bottomless cash machine and new manufacturing capabilities to strong-arm Samsung by threatening to dump more and more quality, zero profit Motorola handsets to squeeze them out of the mid-range price market. Something they couldn't do with just the occasional Nexus phone project. Apple was already squeezing Samsung in the lucrative premium market. None of the other OHA partners were big enough or profitable enough to provide blowback on such a move.
Samsung's own execs were reporting a slowdown in the premium handset market and they missed market estimates in their recent financials. I don't think Google was too happy about some of Samsung's recent moves: The heavy TouchWiz skinning, the competing apps & services, developer conferences, the magazine UI, etc.
Google got Sammy to toe-the-line on Android now, so they don't need the Motorola boat-anchor anymore.
In buying Motorola Google wanted to replicate Apple's model as being the maker of both the software and hardware. This has proved an expensive failure simply because they are NOT Apple! It follows that Microsoft will have the same fate with its Nokia marriage.
Brilliant. Best post.
Also, HP buying and sh*t canning Palm's WebOS. Copying Apple's model is way harder than it looks. And can't be done in a couple of years.
I couldn't agree more. Google saw two advantages to the puchase: patents for at least the appearance of defending Android, and a manufacturing arm to influence their hardware market.
I suspect Google was using their bottomless cash machine and new manufacturing capabilities to strong-arm Samsung by threatening to dump more and more quality, zero profit Motorola handsets to squeeze them out of the mid-range price market. Something they couldn't do with just the occasional Nexus phone project. Apple was already squeezing Samsung in the lucrative premium market. None of the other OHA partners were big enough or profitable enough to provide blowback on such a move.
Samsung's own execs were reporting a slowdown in the premium handset market and they missed market estimates in their recent financials. I don't think Google was too happy about some of Samsung's recent moves: The heavy TouchWiz skinning, the competing apps & services, developer conferences, the magazine UI, etc.
Google got Sammy to toe-the-line on Android now, so they don't need the Motorola boat-anchor anymore.
Very sneaky and very Googley.
Yeah, 12.5B purchased 15000 patents and 2.9B cash. They sold set-top box for 2.3B, and then to Lenovo for 2.9B. So, 12.5 - (2.9 + 2.3 + 2.9) = 4B
So, for 4B, they now have Lenovo as a no-risk Android phone fab, and the IP leverage needed to put Samsung in its place with respect to cross-licensing. It's also got a losing entity off of its books for Wall St. concerns.
Yeah, Page lost a huge bet, but it's not a 12.5B loss as it appears on the surface, and vs. a 350B market cap, it's monopoly money.
Also, HP buying and sh*t canning Palm's WebOS. Copying Apple's model is way harder than it looks. And can't be done in a couple of years.
It requires something you cannot buy: True Vision and the ability to build a loyal inner core that can wear many hats, are tops in their industry at nearly all levels, while being willing to embrace leadership from someone with a lifetime of insight that has never been common. In fact, its exceedingly rare.
Another American company(with a manufacturing presence here even) lost to overseas clutches. This is a DEEP wound here Google. I will not forgive you for this one.
I always wonder that if Google hadn't been so greedy, (and it's very possible that Google may just run by a bunch of people with no business sense what so ever.) would Motorola (instead of Samsung) now be the largest cell phone maker or second behind Apple. All Google had to do was to exclusively license Android to Motorola. By shutting out the foreign cell phone makers of Android, the US with Apple and Motorola may have dominated. (Without Android, Samsung (iPhone rip off) Galaxy line wouldn't even be near as popular as they are now.) Not to mention that Microsoft might even be number 3. The US may have been in control of the technology in the cell phone market. But Google got greedy and gave Android away to all the cell phone makers that wanted to use it. And in the end, even with Android having the lion share of the market, Google still makes over 75% of their mobile revenue from Apple iOS. Google never wanted to compete in the cellphone market. They don't know how. They just wanted to make sure that as many cell phones as possible, have something with Google in it. Even if they have to lose money to accomplish it. And for this, they destroyed a US company whose history goes back to when tube radios was the cutting edge in technology. Google couldn't care less.
Comments
OK. So Google is selling at a lost but it is cutting it losses at the same time.
Moto has been costing Googlel money quarter after quarter.
Larry Page having some fun...
Credit to user @daneoni over at MacRumors for the gif.
I need to lose more money.
Yeah they have other ventures but continually losing money and having a sell off throwing away multiple quarters of profit is not good business. That's what started getting Microsoft into trouble thinking they're untouchable.
Where did you find that? Instant classic. Google should've told Lenovo "tain't enough, call later"
Edit: just realized that you stated where you found it.
Dude, that's YOUR mum!
I wonder how much Nest will resell for...
My mom would've thrown me out of the house if I was online as much as TS.
If Google hadn't bought up the patents, how much could it have had to pay if it were sued using those patents?
Everyone except Google seemed to have known that the patents weren't worth that much, so I guess that they would have been sued for pretty much zilch.
In buying Motorola Google wanted to replicate Apple's model as being the maker of both the software and hardware. This has proved an expensive failure simply because they are NOT Apple! It follows that Microsoft will have the same fate with its Nokia marriage.
Unlikely. They could never have given gotten serious about hardware without pissing off major partners. It's been quoted in various places that the Motorola acquisition was mainly a patent buy. And it seems that Google is keeping most of those patents.
I think this is an offshoot of the recent Google-Samsung patent deal....
It's all about the IPs anyway...
Thinking up a manufacturing process and then actually, you know, *making it* in China is not remotely the same as *actually* making it in the United States.
Can you explain why? For example, if you look at manufacturing they have in Europe (since labor costs are through the roof there), the entire process is automated with only one person touching the product. Clearly the costs are all in the tooling and process.
Also consider Dell. The only thing they did when they manufactured in US is to install the software (completely automated) and add RAM and hard drives. The motherboards, for example, were built in China, and installed into a Chinese made chassis in China. However, it still qualified as US made.
Well, starting with your $5,400,000,000 number, you left out that the purchase price included operating losses that Motorola had already incurred as Motorola... This was money spent by Motorola, not Google, that Google got to write off after the acquisition. $1,000,000,000 domestically and $700,000,000 internationally. So another $1.7bil lopped off.... down to $3.7billion- and there were additional breaks that were expected to continue on to the tune of $700million/yr until 2019 according to Forbes... so when you factor that in the losses (if any) get pretty small pretty quick, especially since they still hold the patents they deem useful to themselves.
I don't think Moto Mobile was a 'win' for Google by any stretch, but the exuberant schadenfreude most of the avid Google haters really isn't all that warranted.
To me I'm just a little sad that the inventor of the mobile phone and the only smartphone designed and made in the US is gone =(
That's not right. When Google wrote off the $1.7B in losses, they only gained the taxes that would have been paid on $1.7B. The write off is deducted from any profit before taxes. Google did not write off $1.7B from the taxes they had to pay. So Google did not gain $1.7B from the write off, more like about $450M. (based on a 25% tax rate)
That is, unless you meant that Google actually gained $1.7B from a tax write off of around $7B.
I couldn't agree more. Google saw two advantages to the puchase: patents for at least the appearance of defending Android, and a manufacturing arm to influence their hardware market.
I suspect Google was using their bottomless cash machine and new manufacturing capabilities to strong-arm Samsung by threatening to dump more and more quality, zero profit Motorola handsets to squeeze them out of the mid-range price market. Something they couldn't do with just the occasional Nexus phone project. Apple was already squeezing Samsung in the lucrative premium market. None of the other OHA partners were big enough or profitable enough to provide blowback on such a move.
Samsung's own execs were reporting a slowdown in the premium handset market and they missed market estimates in their recent financials. I don't think Google was too happy about some of Samsung's recent moves: The heavy TouchWiz skinning, the competing apps & services, developer conferences, the magazine UI, etc.
Google got Sammy to toe-the-line on Android now, so they don't need the Motorola boat-anchor anymore.
Very sneaky and very Googley.
If Google hadn't bought up the patents, how much could it have had to pay if it were sued using those patents?
Maybe the 10 million it made?
The inventor of the cell phone....sheesh.
I'm telling you...Google does not look at it as real money. They're making money on "clicks" for God's sake!
It's not like they earned it, it's not real money to them.
Best.
In buying Motorola Google wanted to replicate Apple's model as being the maker of both the software and hardware. This has proved an expensive failure simply because they are NOT Apple! It follows that Microsoft will have the same fate with its Nokia marriage.
Brilliant. Best post.
Also, HP buying and sh*t canning Palm's WebOS. Copying Apple's model is way harder than it looks. And can't be done in a couple of years.
Yeah, 12.5B purchased 15000 patents and 2.9B cash. They sold set-top box for 2.3B, and then to Lenovo for 2.9B. So, 12.5 - (2.9 + 2.3 + 2.9) = 4B
So, for 4B, they now have Lenovo as a no-risk Android phone fab, and the IP leverage needed to put Samsung in its place with respect to cross-licensing. It's also got a losing entity off of its books for Wall St. concerns.
Yeah, Page lost a huge bet, but it's not a 12.5B loss as it appears on the surface, and vs. a 350B market cap, it's monopoly money.
Brilliant. Best post.
Also, HP buying and sh*t canning Palm's WebOS. Copying Apple's model is way harder than it looks. And can't be done in a couple of years.
It requires something you cannot buy: True Vision and the ability to build a loyal inner core that can wear many hats, are tops in their industry at nearly all levels, while being willing to embrace leadership from someone with a lifetime of insight that has never been common. In fact, its exceedingly rare.
Disappointing to the highest degree.
Another American company(with a manufacturing presence here even) lost to overseas clutches. This is a DEEP wound here Google. I will not forgive you for this one.
I always wonder that if Google hadn't been so greedy, (and it's very possible that Google may just run by a bunch of people with no business sense what so ever.) would Motorola (instead of Samsung) now be the largest cell phone maker or second behind Apple. All Google had to do was to exclusively license Android to Motorola. By shutting out the foreign cell phone makers of Android, the US with Apple and Motorola may have dominated. (Without Android, Samsung (iPhone rip off) Galaxy line wouldn't even be near as popular as they are now.) Not to mention that Microsoft might even be number 3. The US may have been in control of the technology in the cell phone market. But Google got greedy and gave Android away to all the cell phone makers that wanted to use it. And in the end, even with Android having the lion share of the market, Google still makes over 75% of their mobile revenue from Apple iOS. Google never wanted to compete in the cellphone market. They don't know how. They just wanted to make sure that as many cell phones as possible, have something with Google in it. Even if they have to lose money to accomplish it. And for this, they destroyed a US company whose history goes back to when tube radios was the cutting edge in technology. Google couldn't care less.
Such BS
They did it for the former Apple employees...