Only a naive analysis of the figures would conclude that Google sold Motorola at a substantial loss. They bought Motorola for $12.5 billion ($9.5 billion when excluding Motorola's cash) and then moved the STB division for $2.4 billion, bringing the effective acquisition cost down to $7.1 billion. Pull out the $2.9 billion for the handset hardware business from Lenovo and you end up with a $5.8 billion deal for Motorola's large, foundational patent portfolio and its advanced research division, which was not included in the Lenovo sale. Good deal, I say.
Lol @ Motorola's patents being worth ~$6Bn.
I do agree that the naive analysis makes the paper loss seem larger than it is, but the same naive analysis also ignores all the other costs, including the cash Motorola was bleeding while owned by Google, and all the integration expenses, as well as the opportunity costs spent on acquiring Moto (ignore the opportunity cost of the cash, since Google still has more cash to spend, but what of the opportunity costs of the time of the executives and legal team, etc., spent acquiring Motorola?). Additionally, a naive analysis also ignores how the acquisition of Motorola is a strong driver for Samsung to develop their own OS (Tizen) which they are now using in their Gear line of devices.
The most optimistic spin you can give Google's Moto acquisition is "Nice try, and fortunately, no long term harm done".
Also, you didn't mention how motorola was operating at a loss, losing money each quarter that Google owned them. And the patents haven't been nearly as effective or profitable as Google had originally hoped for.
If Google was able to keep the operating loss tax credits on the books after the deal with Lenovo then, apparently, it would bring the cost down to around $3 billion... which, all in all, would be a fair price for the patents... but not $7 billion.
I haven't read anything to date, though, as to whether or not Google was able to keep the tax credits on the books.
Meanwhile... $2.91 billion would be a good price to pay for Synaptic.
I don't believe that. If negotiations have gone this far, it means that Apple has done their due diligence of the company. Look at the trouble Hp got into because they didn't do a responsible due diligence of Autonomy. But Apple is known to be cheap. It could be that they just don't feel that the company, from an accounting viewpoint, is worth another $50 million. That would be foolish, if they're looking to the future, and believe they need to lock this company's IP up.
So if Apple made the assessment that they're not worth another $50 million, I would trust their judgement since they obviously have done intimate and intense research into the company and what they can provide- more than a random bystander like you, who deems passing the deal is "foolish" based on exactly zero information.
3.2 Billion seems to be the same exact amount that Google paid for Nest. 3.2 Billion seems to be a popular figure, widely used by different corporations.
It's quite a close number to pie, give or take 3,199,999,997 or so.
Comments
Only a naive analysis of the figures would conclude that Google sold Motorola at a substantial loss. They bought Motorola for $12.5 billion ($9.5 billion when excluding Motorola's cash) and then moved the STB division for $2.4 billion, bringing the effective acquisition cost down to $7.1 billion. Pull out the $2.9 billion for the handset hardware business from Lenovo and you end up with a $5.8 billion deal for Motorola's large, foundational patent portfolio and its advanced research division, which was not included in the Lenovo sale. Good deal, I say.
Lol @ Motorola's patents being worth ~$6Bn.
I do agree that the naive analysis makes the paper loss seem larger than it is, but the same naive analysis also ignores all the other costs, including the cash Motorola was bleeding while owned by Google, and all the integration expenses, as well as the opportunity costs spent on acquiring Moto (ignore the opportunity cost of the cash, since Google still has more cash to spend, but what of the opportunity costs of the time of the executives and legal team, etc., spent acquiring Motorola?). Additionally, a naive analysis also ignores how the acquisition of Motorola is a strong driver for Samsung to develop their own OS (Tizen) which they are now using in their Gear line of devices.
The most optimistic spin you can give Google's Moto acquisition is "Nice try, and fortunately, no long term harm done".
Most places that I've read about the sale do not come to the same rosy conclusion that you do.
The deal marks one of the worst investments in Google's history.
http://www.cnet.com/news/google-sells-motorola-unit-to-lenovo-for-2-9b/
Also, you didn't mention how motorola was operating at a loss, losing money each quarter that Google owned them. And the patents haven't been nearly as effective or profitable as Google had originally hoped for.
If Google was able to keep the operating loss tax credits on the books after the deal with Lenovo then, apparently, it would bring the cost down to around $3 billion... which, all in all, would be a fair price for the patents... but not $7 billion.
I haven't read anything to date, though, as to whether or not Google was able to keep the tax credits on the books.
Meanwhile... $2.91 billion would be a good price to pay for Synaptic.
I don't believe that. If negotiations have gone this far, it means that Apple has done their due diligence of the company. Look at the trouble Hp got into because they didn't do a responsible due diligence of Autonomy. But Apple is known to be cheap. It could be that they just don't feel that the company, from an accounting viewpoint, is worth another $50 million. That would be foolish, if they're looking to the future, and believe they need to lock this company's IP up.
So if Apple made the assessment that they're not worth another $50 million, I would trust their judgement since they obviously have done intimate and intense research into the company and what they can provide- more than a random bystander like you, who deems passing the deal is "foolish" based on exactly zero information.
It's quite a close number to pie, give or take 3,199,999,997 or so.