Google: Motorola's patents worth $5.5B
Google (NASDAQ:GOOG) has said Motorola Mobility's portfolio of 17,000 patents was a key part of its $12.4 billion acquisition of the company, and now it has put a price on those patents: $5.5 billion. According to a regulatory filing with the Securities and Exchange Commission, that is the value Google gave Motorola's "patents and developed technology."
Motorola's patents are a key reason Google acquired the company--indeed, the patents represent 45 percent of the total value of the deal. Google has said it intends to use the patents to protect Android licensees from patent lawsuits; Apple (NASDAQ:AAPL), Microsoft and others have sued Android licensees including Samsung Electronics, HTC and Motorola over a variety of patent-infringement claims.
Google's disclosure of the value of Motorola's patents was part of a full accounting of the value of the deal. Google said that of the $12.4 billion total purchase price, $2.9 billion was for cash acquired, $5.5 billion was for the patents, $2.6 billion was for goodwill, $730 million was for customer relationships and $670 million was for other net assets acquired. The goodwill of $2.6 billion is primarily attributed to "the synergies expected to arise after the acquisition."
Google has said Motorola will operate as a relatively separate entity, and will continue to make Android hardware, though likely with a focus on a more limited product portfolio than before the acquisition. Google's acquisition of Motorola closed in May after it was approved by antitrust regulators.
It's worth noting that, according to SEC filings from September 2011, Motorola maneuvered Google into paying 33 percent more than its original offer before the final price was agreed to. Google had originally proposed paying $30 per share and wound up paying $40 per share.
Google offered little insight about Motorola's future inside Google during its second-quarter conference call, offering only barebones financial details on the company and a few comments on the company's performance in the quarter.
"We're totally excited about this opportunity," Google CFO Patrick Pichette said. "Everybody should expect some changes at Motorola." However, he repeatedly said that Google has "nothing to announce yet" on Motorola. "It's a little too early to comment on big changes right now," he said.
On Motorola's financials, Google said Motorola revenues clocked in at $1.25 billion ($843 million from the mobile segment and $407 million from the home segment). Motorola's operating loss was $233 million in the quarter ($192 million for the mobile segment and $41 million for the home segment).
- see this SEC filing
- see this WSJ article (sub. req.)
- see this Engadget post
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