It will pay US$2.91 billion for a business that Google acquired from Motorola in August 2011, for US$12.5 billion. That means Google loses nearly $10 billion – in less than three years. Or does it?
What it does mean Google doesn’t want to be in the smartphone business, which is interesting, given its growing presence in tablets and in lots of other hardware areas. We can only suppose that it’s all too hard and too competitive, and that other pastures are greener.
But there’s a bit more to it than that. When Google bought Motorola Mobility it stressed that the main reason it was doing so was to acquire the many patents that company owned.
Motorola almost invented the mobile phone, and those patents go way back. Lots of rubbish, bit some real gems. The sale to Lenovo does not include those patents, which Goggle will now licence to Motorola.
That makes a bit more sense. Everybody wins. Especially Lenovo, which has an instant entry into mobile markets in the West, where it is barely represented.
Google doesn't care. It's got squillions, gets a couple more, and keeps the patents.
And the mobile phone market outside of China has a new big player.