Recently Google sold Motorola to Lenovo for about $3 billion, but we all know Google bought it for $12.5 billion, why is that?
The first reaction of Google's move is surprised and confused. Think about it, $12.5 - $3 = $9.5. Doesn't this tell us Google lost $9.5 billion dollars in two years, are they out of their mind?
Nop, Google is still sane. Shortly after Google acquired Motorola, they put up this website stating their reasoning and the future plan clearly: "Google is great at software; Motorola Mobility is great at devices. The combination of the two makes sense and will enable faster innovation". People interpreted it as Google's first step into the manufacturing game, resulting stock pricing surge. However, Google didn't take any meaningful action with regard to compete against their own customers like Samsung or HTC. In fact, Google is not stupid enough to make their customers feeling betrayed. Their sole focus has always been on strengthening the Android market.
This article talked about how this is not a bad deal for Google. It turned out that Motorola still had $3 billion in cash after acquisition, and the fact that Google retained majority of the patents that probably worth hundreds of million if not few billion dollars. On top of that, Lenovo bought it for $3 billions total up to $9 billions, Google probably only lost around $3 billion dollars. Furthermore, maybe Google consider that $3 billion as an investment in expanding Android market. Lenovo is reputable for their durable laptops like ThinkPad in the PC industry. The Chinese computer manufacturer will certainly be a strong candidate to produce quality mobile devices for the US market. In addition, Google favored free competition in the market, at least in the hardware world. They can certainly form a stronger partnership with different manufacturers to fight against the patent attack.
It's definitely interesting to see yet another foreign manufacturer come in the US market to play. Just like the diversity of race I see walking in UC Berkeley campus. Biology taught me the importance of a divergent ecosystem ensures the robustness of the environment. At least in hardware landscape, Google is making great contribution to maintain market health.
It's a very interesting point that you make. In fact, if you look into it deeper, you can make an argument for the fact that Google actually made a profit off of the deal. They manufactured and sold two extremely successful Motorola smartphones, which made them a lot money, and they also maintained a patent portfolio worth multiple billion dollars. These provided lots of benefits to Google, so they were definitely not unwise to sell.
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