Google announced that it would buy Motorola Mobility for a staggering $12.4 billion. Many were astounded for this was a daring move to defend its patent position. The acquisition was made more than 18 months ago and people are wondering when will Google harvest benefits from such acquisition.
The Red Card for Motorola
A new letter of defeat came from the European Union. It delivered Motorola Mobility a list of formal complaints last Monday concerning on how it makes use of its market position to put into effect a patent-related injunction . The adverse party of such patent is , none other than, Apple.
The European Union is worried that Motorola did not give Apple a share with a patented technology it possesses. It is deemed that when a patented technology is essential to a certain industry, the one who owns such patent shall give a license in fair and reasonable conditions. This worsened when Apple claims that the company is willing to pay royalties. The warning letter came two weeks after the judge of the U.S. federal court ruled that Microsoft must pay $1.8 million instead of $4 billion originally sought by Motorola.
Increasing Losses for Google
A series of defeats in patent made everyone believe that Google had bad luck in its conclusion. Aside from having limited legal and patent benefits from Motorrola, this deal between them created great stress to various partners. Despite such issue, Google intends to run the handset business. But will the handset business ever pay off? The answer is yet to be answered as Google losses continue to drag. In the first quarter of the year, Google lost $271 million. There seems to be no end for the red marks on the Mobility’s balance sheet.
Hope from Handset Business
Nevertheless, there are still results on Google’s effort. Just this April, Google posted an operating profit of $3.48 billion during the first quarter. It also claimed to have $50 billion cash. Another positive move is to discharge home set-top box Motorola business for close to $2.3 billion. This means that Google can also unload itself from the burden of 7,000 employees and a set of patent lawsuits.
Going back to Motorola’s handset business, it is reported to be in a middle of a transformation and it produce some solid phones. Razr lines have kept Motorola running but it only went that far. Perhaps, the “X Phone” which has been rumored may bring them good luck. Nonetheless, Motorola still looks like a huge mistake made by Google.