Google is not having a very good day.

Hugo Miller:

Direct discussions between the two companies about the future of Motorola Mobility’s patent portfolio had begun in early July following Google’s failed bid to buy Nortel Networks Corp.’s patents, according to the document.

But wait, I thought the whole Nortel thing was a ruse, a rope-a-dope. It simply could not have been the catalyst of this deal. Motorola must be lying in their regulatory filing. They were conspiring with Google for years to make Apple look foolish and spend billions on patents for no reason.

Also, the notion that Andy Rubin was brought in at the last second is bullshit. As Miller’s report suggests, he led this deal. 

You see this headline and you think, okay, everyone knew the lawsuits were coming. But what’s crazy is that it’s from a Motorola shareholder who claims that the company did not get the best price possible.

Um. Was he holding out for $100 billion? Maybe an even trillion? Who the fuck was going to pay more than the insane amount Google just laid down for a dog with fleas?

While the shareholder cites Motorola’s recent revenue growth (thanks to Android) he fails to mention that the company actually lost money last quarter.

This is the biggest deal Google has ever done. It’s bigger than any deal Microsoft has ever done. It was a 63% premium over the stock price. And it’s in all cash. 

What a joker.

Well, this lends some credence to the notion that Jha may have helped push Google towards an outright acquisition instead of just a patent buy or licensing agreement. It’s certainly interesting that just days before the deal was done, Jha was suggesting that Motorola could go after other Android players over IP.

This also suggests that Jha could well see as much as $120 million over the past three years if he exits. Which in turn suggests he might not stick around Google/Motorola for long.

And that’s all for running a company that’s losing money. But it’s hard to argue with the fact that he provided a big windfall for investors. 

You’ll notice a common phrase amongst all the Android partners that have weighed in on the Google Motorola purchase so far. 

Do they like that Google is buying a competitor? Of course not, why would they? BUT, they clearly realize this was one of the only ways for Google to offer Android patent protection.

That’s what every single statement is about. It has nothing to do with Google “supercharging” Android. Just “defending” it.

My three initial thoughts on this deal:

1) This shows just how much trouble Google was in with regard to the patent situation. A few weeks ago, they indicated it was wary of spending north of $4 billion on patents. Now they’re spending north of $12 billion.

Make no mistake, that’s the root of this.

And they had to do something wild like this. No matter what your take is on the patent situation, there’s no denying that Android was in serious trouble.

2) All we’re going to hear over the next several months is how committed Google is to keeping Android as an “open” ecosystem with robust partnerships. But actions speak louder than words. Some partners are saying the right things now, but what else are they going to say? “Fuck the platform that we’re now dependent on.”? This is going to be a very tough sell in the long run.

That doesn’t benefit Apple for obvious reasons, but that could benefit someone like Microsoft in the space.

3) This will either go down as the smartest thing Google has ever done, or the dumbest. There is no room for in between when you’re spending $12.5 billion and disrupting a market you control. 

The two key quotes:

However, it has lost its position as the largest U.S. maker of phones to Apple Inc. Motorola sold a total of 8.5 million phones in the quarter, while Apple sold 8.8 million iPhones.

and, maybe crazier:

Four years ago, when the Razr was still popular, Motorola sold 46.1 million phones in the first quarter.