Charles Arthur of The Guardian makes the case for why Google will have to get aggressive with their patents, lest the Motorola deal look like one of the worst purchases in recent years — maybe ever.
The really profitable bit of the business is the “Home” division, which makes set-top boxes, but has been bumping along at around $900m revenues for the past year. It actually makes money - only around $60m per quarter, but at least it’s profit, compared to the consistent losses in the mobile business, which has only made a profit in two of the past nine quarters. Even so, it would take 75 years for the Home business’s profit to make back the money Google paid for the business.
In other words, in purely financial terms, MMI is a dog.
On the face of it, the Motorola deal is such a bad one for Google that it makes absolutely no sense. But one level deeper, when you consider how badly Google was getting screwed in the patent bidding wars, it actually almost seems like they had to do this deal — and that Motorola chief Sanjay Jha knew it.
The problem Google faces is that this reality doesn’t translate easily to shareholders. They’ll see Motorola dragging down Google’s numbers and wonder what the hell they were thinking with the buy?
Even if Google spins out Motorola, it will look bad.
That’s why Arthur’s argument isn’t totally crazy here. I still doubt Google will become a patent pusher — though you could have said the same about Microsoft a couple decades ago — but I think that’s the most obvious way to show what they got out of the Motorola deal.