This deal means Google has given up on Hardware despite what they say, and brings into question if they can ever be competitive in making hardware at a profit on anything so far they can't even come close. The ball has been punted to Microsoft.
This is perhaps the most dramatic evidence to date that Google acts based upon impulse rather than thought-out strategy. Taking actions without significant thought to costs or future consequences is the hallmark of kids.
The Forbes article it came from treated it as $1.7 Bill off the original price, so I don't know if they had it wrong or if it was factored in correctly.... I think the 5,400,000 the orignal author came up with as a price also did not include the $2.9 billion motorolla had in cash at the time. Forbes had Google paying a total of around $1.7 bil for the Moto deal. That was calculated years ago before the sale to Lenovo so if that is true Google would have made money on the sale (not accounting for the losses Moto had from operations).
When you factor in Google kept all their advanced technology patents and divisions from the deal they really didn't do as poorly as the haters are really really wishing they did. And they kept the bit I'm most curious about, project Ara.
Let's put it this way... Google sure as hell didn't lose $12.5 billion.
[... and regulatory filings have stated that Google estimated that $5.5 billion of the $12.5 billion was for the patent trove (whether they were worth that or not is another debate). So... no matter which way you look at it... Google still paid less for the patents then was originally budgeted]
DEBIT: 1. Acquisition cost: USD 12.5bn. 2. Losses of Motorola since acquisition: USD 1.0bn
CREDIT: 1. They sold a division to Arris for USD 2.3bn 2. They sell the rest of Motorola to LENOVO for USD 2.9bn 3. From the 20 000 patents (estimated to be worth USD 5.5bn at the time of acquisition), they only sell 2000 to LENOVO and grant exploitation rights on the remaining ones.
BOTTOM LINE: If the patents are really worth USD 5.5bn, they still loose USD 2.8bn. Not bad. I still can't imagine what would have happened if Apple would have done the same.
2. Losses of Motorola since acquisition: USD 1.0bn
CREDIT:
1. They sold a division to Arris for USD 2.3bn
2. They sell the rest of Motorola to LENOVO for USD 2.9bn
3. From the 20 000 patents (estimated to be worth USD 5.5bn at the time of acquisition), they only sell 2000 to LENOVO and grant exploitation rights on the remaining ones.
BOTTOM LINE:
If the patents are really worth USD 5.5bn, they still loose USD 2.8bn. Not bad.
I still can't imagine what would have happened if Apple would have done the same.
You forgot the $3 billion in cash that came with the deal when Google bought MotoMobile.
If the patents are really worth USD 5.5bn, they still loose USD 2.8bn. Not bad.
And some of the patents are invalid, so there goes that, minus the court fees they had to pay to learn that. " src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
You forgot the $3 billion in cash that came with the deal when Google bought MotoMobile.
... and the $1 billion tax credit.
I thought I already had included the 'tax credit' in the overall losses. I stand corrected. But, indeed I completely forgot the cash. This deal starts to look more savvy by the minute...
A couple day AI has an article that showed that. You missed it?
From the discussion with you in another article I noticed you are like Apple management poor in math.
Yes, the source was from a company that AI has in a previous article pointed out slants the figures against Apple to favor its customers who are generally Android and PC hardware manufacturers.
And some of the patents are invalid, so there goes that, minus the court fees they had to pay to learn that. " src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
The frustration at Google making a savvy move and being rewarded just oozes out of your posts. Why so partisan TS? Do you own AAPL or are you just a massive fan?
Yes, the source was from a company that AI has in a previous article pointed out slants the figures against Apple to favor its customers who are generally Android and PC hardware manufacturers.
That accusation comes up every single time anyone is negative to Apple in any light. Funnily enough you never seem to see it when sites are reporting positively about Apple.
2+2 equals $13.8 billion in profit and increasing product marketshare, which is all that Wall Street cares about every day of the year EXCEPT Apple’s quarterly earning calls. [/quote]
Google are expected to announce revenues af around $17billion with net profit at about 16%. And the company is valued at around 80% of Apple and closing on a daily basis. They will soon pass Apple at this rate. WTF is up with Wall Street?
The frustration at Google making a savvy move and being rewarded just oozes out of your posts.
Are you a certifiable idiot or just the troll we all know you to be?
It’s a savvy move to lose billions on a company that did absolutely nothing for you and only served to further harm your reputation and portfolio? “Cutting your losses” is not a savvy move. It’s an explicit admission of NOT making savvy moves because you’re inherently dealing with the LOSS caused by your LACK of savvy moves.
This is like saying its savy to pay $3,000,000,000 for a toilet since it can be a tax write-off.
Google lost BILLIONS on this deal.
Right but they paid those billions quite a while ago. What they have done now is to unload a loss-making asset for $3B while keeping hold of some of the potentially valuable IP which is what they needed after all.
So what if the overall loss is a few billion? That was already off the credit sheets when they spent $12B initially and now Google's profits are inflated by whatever loss MM isn't making for them.
Right but they paid those billions quite a while ago. What they have done now is to unload a loss-making asset for $3B while keeping hold of some of the potentially valuable IP which is what they needed after all.
So what if the overall loss is a few billion? That was already off the credit sheets when they spent $12B initially and now Google's profits are inflated by whatever loss MM isn't making for them.
Google was expecting to pay $5.5 billion for the patents regardless of future outcome.
They paid less than that in the end.
Most of the patents are still owned by Google, so they are still owned property... no loss as far as Google is concerned. Just the same as the Nortel patents that Apple owns.
As you say, it's past history to Google... and they are even getting something in return for dumping MM.
This deal means Google has given up on Hardware despite what they say, and brings into question if they can ever be competitive in making hardware at a profit on anything so far they can't even come close. The ball has been punted to Microsoft.
I don't think Google has actually tried its hand at hardware. They bought Motorola back in 2011 and it took 18 months for Motorola to empty its existing pipeline of products. The only two handsets Motorola newly designed while under Google's ownership were the Moto X and Moto G. During this whole time Motorola claimed to be operating essentially independently of Google, without special access to Android. Google could never have gone all in as a smartphone manufacturer anyway without destroying its relations with all the other Android makers.
Google are expected to announce revenues af around $17billion with net profit at about 16%. And the company is valued at around 80% of Apple and closing on a daily basis. They will soon pass Apple at this rate. WTF is up with Wall Street?
Why don't you read a book about how companies are valued? Google has much faster growth than Apple.
Why don't you read a book about how companies are valued? Google has much faster growth than Apple.
But how many years will it take the to reach the same levels if income and profit as Apple. Apples profit is almost as much as Googles revenue. They will probably never be able to increase their advertising revenue to that of Apple. Also countries around the work are getting sick of Googles disregard for privacy. It will not be long before governments will introduce legislation to prevent Googles spying. Examples are Germany making Google get rid of street view and the EU looking at Google fixing search results. Also Google will never get access to China's market. Google has a mountain of problems piling up that they will need to face in the near future.
Yes they paid for it but it was on their balance sheet as an Asset last Quarter.
Now it will get moved to a LOSS. It will smash their CURRENT EARNINGS not PAST EARNINGS.
You are talking purely in cash flow terms.
Even if that was the case, why would it matter? They're better off cash wise than they were, they're better off profit wise than they were. They are also more likely to be able to grow in future without a big MM shaped anchor
Comments
Reportedly Google is not giving up on hardware. On the contrary . . .
http://techcrunch.com/2014/01/29/nest-team-will-become-googles-core-hardware-group/
This deal means Google has given up on Hardware despite what they say, and brings into question if they can ever be competitive in making hardware at a profit on anything so far they can't even come close. The ball has been punted to Microsoft.
The Forbes article it came from treated it as $1.7 Bill off the original price, so I don't know if they had it wrong or if it was factored in correctly.... I think the 5,400,000 the orignal author came up with as a price also did not include the $2.9 billion motorolla had in cash at the time. Forbes had Google paying a total of around $1.7 bil for the Moto deal. That was calculated years ago before the sale to Lenovo so if that is true Google would have made money on the sale (not accounting for the losses Moto had from operations).
When you factor in Google kept all their advanced technology patents and divisions from the deal they really didn't do as poorly as the haters are really really wishing they did. And they kept the bit I'm most curious about, project Ara.
DEBIT:
1. Acquisition cost: USD 12.5bn.
2. Losses of Motorola since acquisition: USD 1.0bn
CREDIT:
1. They sold a division to Arris for USD 2.3bn
2. They sell the rest of Motorola to LENOVO for USD 2.9bn
3. From the 20 000 patents (estimated to be worth USD 5.5bn at the time of acquisition), they only sell 2000 to LENOVO and grant exploitation rights on the remaining ones.
BOTTOM LINE:
If the patents are really worth USD 5.5bn, they still loose USD 2.8bn. Not bad.
I still can't imagine what would have happened if Apple would have done the same.
Let's make a quick calculation:
DEBIT:
1. Acquisition cost: USD 12.5bn.
2. Losses of Motorola since acquisition: USD 1.0bn
CREDIT:
1. They sold a division to Arris for USD 2.3bn
2. They sell the rest of Motorola to LENOVO for USD 2.9bn
3. From the 20 000 patents (estimated to be worth USD 5.5bn at the time of acquisition), they only sell 2000 to LENOVO and grant exploitation rights on the remaining ones.
BOTTOM LINE:
If the patents are really worth USD 5.5bn, they still loose USD 2.8bn. Not bad.
I still can't imagine what would have happened if Apple would have done the same.
You forgot the $3 billion in cash that came with the deal when Google bought MotoMobile.
... and the $1 billion tax credit.
If the patents are really worth USD 5.5bn, they still loose USD 2.8bn. Not bad.
And some of the patents are invalid, so there goes that, minus the court fees they had to pay to learn that.
" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
You forgot the $3 billion in cash that came with the deal when Google bought MotoMobile.
... and the $1 billion tax credit.
I thought I already had included the 'tax credit' in the overall losses. I stand corrected. But, indeed I completely forgot the cash. This deal starts to look more savvy by the minute...
A couple day AI has an article that showed that. You missed it?
From the discussion with you in another article I noticed you are like Apple management poor in math.
Yes, the source was from a company that AI has in a previous article pointed out slants the figures against Apple to favor its customers who are generally Android and PC hardware manufacturers.
And some of the patents are invalid, so there goes that, minus the court fees they had to pay to learn that.
" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
The frustration at Google making a savvy move and being rewarded just oozes out of your posts. Why so partisan TS? Do you own AAPL or are you just a massive fan?
Yes, the source was from a company that AI has in a previous article pointed out slants the figures against Apple to favor its customers who are generally Android and PC hardware manufacturers.
That accusation comes up every single time anyone is negative to Apple in any light. Funnily enough you never seem to see it when sites are reporting positively about Apple.
I don't get it. Truth isn't a democracy.
2+2 equals $13.8 billion in profit and increasing product marketshare, which is all that Wall Street cares about every day of the year EXCEPT Apple’s quarterly earning calls.
[/quote]
Google are expected to announce revenues af around $17billion with net profit at about 16%. And the company is valued at around 80% of Apple and closing on a daily basis. They will soon pass Apple at this rate. WTF is up with Wall Street?
The frustration at Google making a savvy move and being rewarded just oozes out of your posts.
Are you a certifiable idiot or just the troll we all know you to be?
It’s a savvy move to lose billions on a company that did absolutely nothing for you and only served to further harm your reputation and portfolio? “Cutting your losses” is not a savvy move. It’s an explicit admission of NOT making savvy moves because you’re inherently dealing with the LOSS caused by your LACK of savvy moves.
This is like saying its savy to pay $3,000,000,000 for a toilet since it can be a tax write-off.
Google lost BILLIONS on this deal.
Right but they paid those billions quite a while ago. What they have done now is to unload a loss-making asset for $3B while keeping hold of some of the potentially valuable IP which is what they needed after all.
So what if the overall loss is a few billion? That was already off the credit sheets when they spent $12B initially and now Google's profits are inflated by whatever loss MM isn't making for them.
Right but they paid those billions quite a while ago. What they have done now is to unload a loss-making asset for $3B while keeping hold of some of the potentially valuable IP which is what they needed after all.
So what if the overall loss is a few billion? That was already off the credit sheets when they spent $12B initially and now Google's profits are inflated by whatever loss MM isn't making for them.
Google was expecting to pay $5.5 billion for the patents regardless of future outcome.
They paid less than that in the end.
Most of the patents are still owned by Google, so they are still owned property... no loss as far as Google is concerned. Just the same as the Nortel patents that Apple owns.
As you say, it's past history to Google... and they are even getting something in return for dumping MM.
This deal means Google has given up on Hardware despite what they say, and brings into question if they can ever be competitive in making hardware at a profit on anything so far they can't even come close. The ball has been punted to Microsoft.
I don't think Google has actually tried its hand at hardware. They bought Motorola back in 2011 and it took 18 months for Motorola to empty its existing pipeline of products. The only two handsets Motorola newly designed while under Google's ownership were the Moto X and Moto G. During this whole time Motorola claimed to be operating essentially independently of Google, without special access to Android. Google could never have gone all in as a smartphone manufacturer anyway without destroying its relations with all the other Android makers.
Google are expected to announce revenues af around $17billion with net profit at about 16%. And the company is valued at around 80% of Apple and closing on a daily basis. They will soon pass Apple at this rate. WTF is up with Wall Street?
Why don't you read a book about how companies are valued? Google has much faster growth than Apple.
But how many years will it take the to reach the same levels if income and profit as Apple. Apples profit is almost as much as Googles revenue. They will probably never be able to increase their advertising revenue to that of Apple. Also countries around the work are getting sick of Googles disregard for privacy. It will not be long before governments will introduce legislation to prevent Googles spying. Examples are Germany making Google get rid of street view and the EU looking at Google fixing search results. Also Google will never get access to China's market. Google has a mountain of problems piling up that they will need to face in the near future.
Yes they paid for it but it was on their balance sheet as an Asset last Quarter.
Now it will get moved to a LOSS. It will smash their CURRENT EARNINGS not PAST EARNINGS.
You are talking purely in cash flow terms.
No, it won't. We will see in a couple of hours...
Yes they paid for it but it was on their balance sheet as an Asset last Quarter.
Now it will get moved to a LOSS. It will smash their CURRENT EARNINGS not PAST EARNINGS.
You are talking purely in cash flow terms.
Even if that was the case, why would it matter? They're better off cash wise than they were, they're better off profit wise than they were. They are also more likely to be able to grow in future without a big MM shaped anchor