You have probably heard by now that Google is acquiring Motorola Mobility for $12.5 billion. On the face of it, the acquisition seems like an incredibly aggressive move by Google. However, in reality, this acquisition is all about defense.
Forgive me for being clichÃ©d, but as they say, offense is the best form of defense, and that’s exactly what this deal is all about. As we have already discussed, one of the key assets of Motorola Mobility is its patent trove. Android and its partners have come under fire in the recent months due to alleged patent infringements. In fact, Microsoft has found a smart way to earn possibly even more than Google is doing from Android by licensing its patents to manufacturers like HTC. Unfortunately, there’s not much Google can do at the moment because of its weak patent portfolio. It can’t hit back at the likes of Microsoft or Oracle. That’s the reason why Google was desperate to grab the Nortel and Novel patents. That’s the reason behind Google’s public outburst at the current patent scenario. However, Motorola with its twenty five thousand patents (17,000 granted, 7,000 pending) will change all of this. If you consider that Nortel’s patents were sold for as much as four billion dollars, the $12.5 billion price for Motorola doesn’t seem very steep. Motorola will undoubtedly offer Google other benefits, including the ability to build the Android device that it really wants to, and shape the ecosystem with firmer hands. However, the real reason for buying Motorola is undoubtedly to protect Android and its ecosystem from being devoured by patent infringement lawsuits from competitors. Larry Page doesn’t try to hide this in his announcement. Although he does throw in the usual generic remarks that the acquisition will help accelerate innovationand supercharge the entire Android ecosystem, he goes on to dedicate an entire paragraph on the significance of Motorola’s patent portfolio.
We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to protect competition and innovation in the open source software communityand it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.
If you still have doubts regarding the real reason behind the acquisition, have a look at the official reactions from other Android handset manufacturers.
We welcome the news of todays acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.
Peter Chou, CEO, HTC Corp.
I welcome Googles commitment to defending Android and its partners.
Bert Nordberg, President & CEO, Sony Ericsson
We welcome Googles commitment to defending Android and its partners.
Jong-Seok Park, Ph.D, President & CEO, LG Electronics Mobile Communications Company
The common phrase in the statements released by HTC, Sony Ericsson, and LG is defending Android and its partners.