Tags:

Rope-a-dope.
August 17, 2011 2:56 AM Subscribe

Suck on it Applesoft. "Everyone was baffled when Google made those crazy bids for the Nortel patents last month. Remember? They bid things like the distance from the earth to the sun, the number pi, and some other wacky numbers from mathematics."

Today in the wake of Goolge's $12.5bn acquisition of Motorola Mobility...."it all makes sense. Google just sandbagged its rivals. The whole thing was a rope-a-dope maneuver. Google never cared about the Nortel patents. It just wanted to drive up the price so that AppleSoft (those happy new bedmates) would overpay. As for those crazy bids in the Nortel auction — that was just a way to leave a little “fuck you” in the paperwork for Google’s pals in Redmond and Cupertino to look back upon. That move is pure Larry Page. This is a smart, hyper-competitive guy with a mean streak and a nasty sense of humor. Kara Swisher recently compared him to Bill Gates, and now I see why. Page is turning out to be a better CEO, and more fun to cover, than anyone could have imagined."

posted by three blind mice (211 comments total) 17 users marked this as a favorite

Balls?
posted by chavenet at 3:07 AM on August 17, 2011 [13 favorites]

Oh, fer Chrissakes. Google has paid about three times as much as "Applesoft" for about three times as many patents, plus a hardware business it needs about as much as a hole in the head. So, if the Nortel consortium "overpaid", then so did Google now.

It's just business, and it becomes pretty tiring to see the fanbois on both sides cheering on their favourite CEOs as if they were sports stars or politicians.
posted by Skeptic at 3:15 AM on August 17, 2011 [45 favorites]

I think Gruber may have mentioned this in his article, but Android right now only makes Google about $1 billion in revenues per annum. This wasn't a carefully considered, confident move; it's a desperate knee jerk reaction by the big G to defend themselves from lawsuits by the owners of the Nortel patents. The smartphone business is rapidly descending into a race to secure patents, to counter lawsuits with lawsuits and it's preventing anyone from doing any actual innovation.

Patents, especially software patents, are incredibly broken and this is yet more proof of that.
posted by _frog at 3:24 AM on August 17, 2011 [26 favorites]

Balls

Indeed: "Look at Google’s financial results. They reported $8.5 billion in net income this year, and $6.5 billion last year. That’s for all of Google. They’re offering $12.5 billion for Motorola. So Google just spent almost two years of its profits to buy a second-rate phone maker that itself is unprofitable,1 almost went bankrupt, and is arguably only the third-best maker of Android devices, behind HTC and Samsung."
posted by Brandon Blatcher at 3:28 AM on August 17, 2011 [7 favorites]

"Now Google has to find a way to recoup at least $12.5 billion from Android (on top of whatever else it was investing to build the OS). That looks very difficult. Earlier this year, Gene Munster, an analyst at Piper Jaffray, estimated that Google makes just $6 in ad revenue per Android user per year. By 2012, that number could be $10 per Android user per year. Across all users, that would mean about $1 billion in annual revenue. Even if that figure grows over time, it will take a long time for Google to make back the money it spent on Motorola, let alone to turn a profit."
posted by 1970s Antihero at 3:37 AM on August 17, 2011

... buys up the best IP portfolio in the mobile space ...

What does he mean by this? Is there something special in Motorola's IP portfolio?
posted by memebake at 3:40 AM on August 17, 2011

Is there something special in Motorola's IP portfolio?

Not sure on this, but I think Motorola's been in the mobile business for longer than pretty much anyone else.
posted by Jpfed at 3:50 AM on August 17, 2011 [2 favorites]

Additional information missing from the FPP:

a hardware business

What exactly is Google buying?

posted by three blind mice at 3:52 AM on August 17, 2011 [2 favorites]

This is a smart, hyper-competitive guy with a mean streak and a nasty sense of humor. Kara Swisher recently compared him to Bill Gates, and now I see why.

OK, I see the smart, hyper-competitive, and mean streak parts, but where is there evidence that Gates has a sense of humor?
posted by Kirth Gerson at 3:56 AM on August 17, 2011 [2 favorites]

Android seems like a terrible proposition for Google shareholders. Google makes almost no money off of it even though they have 46% of the market. Meanwhile the guy with 18% share is the most insanely profitable company out there. Microsoft is getting $5/phone from HTC for every Android phone, while Google gets $0. Meanwhile they are left exposed to billions of dollars in litigation costs from Oracle. Now on top of this turkey they must spend 12 billion on Motorolla. Google should stick to cloud based web services and apps.
posted by humanfont at 3:57 AM on August 17, 2011

I like the mathematical constant bids. Fun.
posted by memebake at 4:07 AM on August 17, 2011 [1 favorite]

humanfont: "Android seems like a terrible proposition for Google shareholders. Google makes almost no money off of it even though they have 46% of the market."

I don't know about that. Without Android the mobile market would be controlled by people who aren't Google; i.e. people who can't be relied upon always to provide customers for Google's search, mail, advertising, etc.
posted by ArmyOfKittens at 4:20 AM on August 17, 2011 [4 favorites]

This is a smart, hyper-competitive guy with a mean streak and a nasty sense of humor.

Sounds like the perfect person to uphold the company motto.
posted by DU at 4:24 AM on August 17, 2011 [6 favorites]

stop masturbating to business news.
posted by ennui.bz at 4:31 AM on August 17, 2011 [25 favorites]

Is that a monthly report in your pocket or are you just happy to merge with me?
posted by Brandon Blatcher at 4:33 AM on August 17, 2011 [5 favorites]

Google didn't buy get into the mobile business to open up vast new revenue streams, they did it to protect their core business - advertising. They are playing the longest of games, they see a time when most of the communication on the internet is done with mobile devices; devices that typically come bundled with services that Google can't worm their way into like they did with mail.

Now that they are players, they are finding the mobile game is played a lot harder than the gentlemanly Internet-world. I don't know about Motorola specifically, but it may turn out to be a wise investment if it takes the heat off the patent battles.
posted by AndrewStephens at 4:34 AM on August 17, 2011 [6 favorites]

Hilarious that Dan Lyon is now all gung-ho about Linux (Android) when a few years ago he couldn't wait for SCO to sue it out of existence.
posted by PenDevil at 4:35 AM on August 17, 2011 [6 favorites]

1970s Antihero: Google makes just $6 in ad revenue per Android user per year

I wonder how much money Google makes from a typical iOS user per year. More or less than this $6?
posted by nowonmai at 4:36 AM on August 17, 2011 [1 favorite]

"Android seems like a terrible proposition for Google shareholders. Google makes almost no money off of it even though they have 46% of the market."

I do hope when google indexes this thread this comment is highlighted at their next strategy meeting.

FOOLS! Capturing a large segment of the market when you're a late entrant by giving way stuff is a losers' game. I bet they hadn't thought that one through!
posted by the noob at 4:37 AM on August 17, 2011 [4 favorites]

Wow. This makes baseball seem exciting.
posted by n9 at 4:46 AM on August 17, 2011 [11 favorites]

I feel like Gruber's smackdown of this stupid Dan Lyons article deserves a little more prominent attention that chavenet's cryptic one-word link. To wit:

Look at Google’s financial results. They reported $8.5 billion in net income this year, and $6.5 billion last year. That’s for all of Google. They’re offering $12.5 billion for Motorola. So Google just spent almost two years of its profits to buy a second-rate phone maker that itself is unprofitable,1 almost went bankrupt, and is arguably only the third-best maker of Android devices, behind HTC and Samsung.
posted by charlie don't surf at 4:48 AM on August 17, 2011 [4 favorites]

Oh shoot, brandon quoted that same paragraph. Note to self: finish that morning coffee AND reading the whole page before posting in the AM.
posted by charlie don't surf at 4:49 AM on August 17, 2011

Google doesn't precisely do vendor lock-in the way Apple does it, but if they keep on pushing their software to enough people and keep on diversifying it, the chances are rather high that sooner or later you'll spend money on one Google product or another. Google doesn't really care which.
posted by LogicalDash at 4:52 AM on August 17, 2011

This is becoming a perfect example of Why Wasn't I Consulted?
posted by odinsdream at 5:05 AM on August 17, 2011 [7 favorites]

Motorola invented the cell phone, so i'm sure they have some cool patents. 12.5 billion dollar cool, now that's hard to say. Clearly despite all their patent hate on talk, Google really wanted some sweet sweet patents.

Also, there is some serious GRAR in this FPP. Did Apple kill Three Blind Mices' parents, and now he fights crime?
posted by chunking express at 5:11 AM on August 17, 2011 [3 favorites]

Yes, paying $12bn instead of $4bn sure showed them. ::rolleyes::
posted by unSane at 5:12 AM on August 17, 2011 [1 favorite]

Dan Lyons and John Gruber can go fight this off on a desert island somewhere. Wankers, both of them.
posted by mr.marx at 5:14 AM on August 17, 2011 [4 favorites]

Clearly despite all their patent hate on talk, Google really wanted some sweet sweet patents.

Mr. Lawrence Page was ill-placed to complain about "bogus software patents", in any case.
posted by Skeptic at 5:15 AM on August 17, 2011

Google is going to take a bath on this. Just a terrible acquisition and shows that they think they're really vulnerable to a patent lawsuit.
posted by empath at 5:16 AM on August 17, 2011 [1 favorite]

Motorola invented the cell phone, so i'm sure they have some cool patents.

You mean of the expired variety? Remember, patents only last for 20 years in the us, which means the foundational tech is all well out of patent. Whereas they may still have some neat stuff in there, a lot of the valid patents are going to be from a pre-smart phone world.
posted by sadmarvin at 5:17 AM on August 17, 2011 [2 favorites]

12 billion dollars for a failed hardware company that was circling the drain already? For 12 billion dollars in R&D you could reinvent the entire concept of the mobile phone. Sorta like Apple did.

Hard to imagine any IP portfolio worth two-plus years of earnings. The way all these companies are using what look to me to be spurious IP claims to defend market share in court is unsustainable. Almost any of the technical problems involved can be solved in numerous ways that don't rely on others' patents.

Google has stumbled big time here. If I were a shareholder I'd be nervous.
posted by spitbull at 5:19 AM on August 17, 2011 [2 favorites]

By 2012, that number could be $10 per Android user per year. Across all users, that would mean about $1 billion in annual revenue.

I think Google's margins are pretty good on advertising, so if we assume $500 million in profit on a billion in revenue, it doesn't look completely unreasonable. When you get into those sizes, it's very hard to get the returns that you can get as a small company. It's not like they could take their $12 billion and get more interest than that, since the markets are all messed up. That's about a 4 percent return on a HELL of a lot of money, and if they can use their expertise to increase that revenue, that'll make that figure even more appealing.

Of course, they could also completely screw the pooch and destroy what's left of Motorola Mobility; tech acquisitions tend to be painful and hard to manage well. The culture clashes can be significant, and if the impedance match is severe, they may get nothing like a billion in year of revenue out of that division.

But I do think this is a survival move by Google. Something like this was a necessity if they wanted to avoid slowly getting starved out and made irrelevant over the next ten to twenty years. Even if the deal had looked completely unreasonable from a direct fiscal perspective, which it doesn't, they needed to do it anyway. Taken purely in revenue gained for the price paid, it's maybe a little marginal, but with good management, it could be turned into an extremely valuable deal.

AND they get the patents. Even ignoring the patents, it doesn't look too bad, and WITH them, I'd say it's a hell of a deal.
posted by Malor at 5:24 AM on August 17, 2011

Woooo, go Humongous Corporation A! You stick it to Humongous Corporations B & C!
posted by indubitable at 5:27 AM on August 17, 2011 [35 favorites]

s/a billion in year/a billion a year/
posted by Malor at 5:29 AM on August 17, 2011

Yes, Google can recoup its losses within several years, likely made this buy for the mass of IP behind Motorola, and is going to use that IP to build SUPER DUPER PHONE/TABLET/READER/ROBOT 1.0... But is it just me? Is anyone else nervous about the insane amount of data they are currently compiling from users (that has to be worth much more than the measley $1 billion they are earning from ad revenue)? I don't buy the argument that they have taken more than they can chew. I don't think that utilizing this user data in the name 'customizing the Android experience' would be difficult for most Americans to accept, and would be incredibly profitable for Google.

I'm going to go take off my tinfoil hat now and rejoin society.
posted by genekelly'srollerskates at 5:29 AM on August 17, 2011

Indeed: "Look at Google’s financial results. They reported $8.5 billion in net income this year, and $6.5 billion last year. That’s for all of Google. They’re offering $12.5 billion for Motorola. So Google just spent almost two years of its profits to buy a second-rate phone maker that itself is unprofitable,1 almost went bankrupt, and is arguably only the third-best maker of Android devices, behind HTC and Samsung."

They are sitting on a pile of cash, recent profits or no. When Henry Blodget says it was a bad move, you can bet it was a pretty good one.
posted by Ironmouth at 5:33 AM on August 17, 2011 [2 favorites]

use that IP to build SUPER DUPER PHONE/TABLET/READER/ROBOT 1.0...

Yeah, actually they need the hardware company to mass build mobileKillBot 2.0. MKB 1.0 is flying around the googleplex zapping iPhones right now.
posted by a robot made out of meat at 5:36 AM on August 17, 2011 [1 favorite]

but where is there evidence that Gates has a sense of humor?

Windows ME.
posted by Wolof at 5:37 AM on August 17, 2011 [19 favorites]

Clearly despite all their patent hate on talk, Google really wanted some sweet sweet patents.

Notably, buying Motorola means Google also bought patent suits against Apple, Microsoft, and TiVo. It will be interesting to see if Google promptly dismisses those suits or if it maintains them. If the latter, then that would put paid to the notion that Google only uses patents defensively.
posted by jedicus at 5:40 AM on August 17, 2011 [1 favorite]

C'mon, Google has a fantastic record in consumer hardware.

Oh, wait.
posted by unSane at 5:45 AM on August 17, 2011 [1 favorite]

The reason Google did this has nothing to do with Apple or Microsoft. It's the Oracle suit that they are going to flat out lose -- the one that's going to have them giving $30 or so for every copy of Android that was activated to Oracle for the massive license issues -- not patent, license -- with the Java VM that they flat out stole.

The reason we know this is that they fucked up and sent the emails admitting that to Oracle during discovery. They are now panicking. First, they're trying to convince the judge -- who's about to award a preliminary injunction against Google -- that those emails are protected under attorney-client privilege. That's probably not going to work, and if it doesn't, well, the phrase used by the judge was "between this email and the Magna Carta, I don't see how this suit fails."

So -- they desperately need a big wad of patents to threaten Oracle back and get a reasonable license fee. That's why they were part of the coalition that priced the Nortel patents at 1.0 billion -- and then spent three times that. They thought that was a shoe in. They forgot that Apple and Microsoft, while certainly not flawless, are not run by dumb people.

Then, they panicked harder, and in six weeks, they overpaid for MOT by about 60%. Meanwhile, HTC and Samsung are shitting bricks, because they just realized that Google can now use this to beat much higher prices out of them -- "Well, fine, we don't need you to make handsets."

The might be playing a long game. They might even be playing the long game well. It will be a shame, then, that they won't be around because they're playing the short game so horribly wrong.
posted by eriko at 5:51 AM on August 17, 2011 [16 favorites]

Googola
posted by blue_beetle at 5:53 AM on August 17, 2011 [1 favorite]

Meanwhile, HTC and Samsung are shitting bricks, because they just realized that Google can now use this to beat much higher prices out of them -- "Well, fine, we don't need you to make handsets."

HTC and Samsung can just fork Android.
posted by empath at 5:55 AM on August 17, 2011

Google is going to take a bath on this. Just a terrible acquisition and shows that they think they're really vulnerable to a patent lawsuit.

A friend of mine pointed out how he feels andriod was a spree of patent lawsuits waiting to happen, yep, it's open and all, but so, so many patent violations happening left and right.
posted by usagizero at 5:56 AM on August 17, 2011

HTC and Samsung can just fork Android.

Not unless they intend to either replace or pay for the infringing portions of it.
posted by Jpfed at 6:01 AM on August 17, 2011

The reason Google did this has nothing to do with Apple or Microsoft. It's the Oracle suit that they are going to flat out lose

That's an interesting take, but what value will Motorola's mobile patents have in the fight against Oracle?
posted by killdevil at 6:01 AM on August 17, 2011 [1 favorite]

A friend of mine pointed out how he feels andriod was a spree of patent lawsuits waiting to happen, yep, it's open and all, but so, so many patent violations happening left and right.

I'd love to be a fly on the wall at that meeting.

"So we're going to use this proprietary software without a license..."

"There's no other way. Everything else sucks so much it would cripple the platform, and we can't get a favorable contract."

"...and make it open source."

"Um....."
posted by Holy Zarquon's Singing Fish at 6:06 AM on August 17, 2011

Apple has turned seriously evil over the last few years since Android devices started trouncing the iPhone. Go Google!

I've only owned one Motorola phone, an SLVR, the hardware seemed solid, but the software sucked royally. I'd imagine that Google has the expertise to improve upon Motorola's product, making them more competitive with HTC and Samsung. I'd hope however that Google won't harm other Android phone makers.

I have not deeply looked into the Oracle licensing suit myself. In the long run, Google could avoid licensing fees by reimplementing their own JIT, perhaps starting with the LLVM. I donno avout the short run, maybe Motorola's IP will help them.

$80 Android Phone Sells Like Hotcakes in Kenya, the World Next?
posted by jeffburdges at 6:06 AM on August 17, 2011

A friend of mine pointed out how he feels andriod was a spree of patent lawsuits waiting to happen

Beware of geeks bearing gifts.
posted by Skeptic at 6:07 AM on August 17, 2011 [1 favorite]

Suck on it Applesoft.

This stuff does actually interest me, but it might help if you don't choose the most brain dead article on the subject to present it. Link bait... look into it.

Apple has turned seriously evil over the last few years since Android devices started trouncing the iPhone. Go Google!

This sentence contains so much humor I kind of hope you write for the onion.
posted by justgary at 6:19 AM on August 17, 2011 [5 favorites]

a robot made out of meat: "Yeah, actually they need the hardware company to mass build mobileKillBot 2.0. MKB 1.0 is flying around the googleplex zapping iPhones right now."

No, I don't work for Google.
posted by mkb at 6:21 AM on August 17, 2011 [8 favorites]

"Remember?"

Nope. Link to the FPP?

"Suck on it Applesoft."

That should be: "Suck on it, Applesoft." Remember the addressive comma?

I'm not posting to gripe that I find this topic boring and therefore you shouldn't post it. I'm commenting to suggest that you use less insider-y framing, because I don't know if I find this topic interesting without clicking through, based on your framing. It's exclusionary, while the front page of MetaFilter should be inclusive, encouraging, and educating. Don't assume every reader has all the information you have. Don't assume that just because they don't have all the information you have that they're not interested in the subject matter so you shouldn't bother explaining.
posted by Eideteker at 6:23 AM on August 17, 2011 [7 favorites]

stop masturbating to business news.

Given I have but one favorite to give to this statement, I hereby nominate it for a place on the New Post screen. Business posts, fine. Doing the wave for a massive corporation, nyet.
posted by yerfatma at 6:25 AM on August 17, 2011

No, I don't work for Google.

On 17th August, 2011, Skynet became self-aware.
posted by jaduncan at 6:25 AM on August 17, 2011 [4 favorites]

In the long run, Google could avoid licensing fees by reimplementing their own JIT, perhaps starting with the LLVM.

Oracle accuses Google of violating patents, not copyrights. They've already implemented their own virtual machine called "Dalvik". It's possible that they could avoid Oracle's patents by doing ahead-of-time compilation directly into machine code, but it would be pretty hard to implement that without breaking some number of existing programs which depend on dynamic loading and runtime type introspection.

Disclaimer: as a Microsoft employee, I'm forbidden from reading any patents -- so I have no idea what Oracle's patents claim to cover. Also, software patents are stupid.
posted by Slothrup at 6:27 AM on August 17, 2011 [8 favorites]

This is true for open source in general and a lot of linux products in particular.

But most free software / open source projects have no assets or very limited assets to go after in a patent suit and are too fluidly organized and globalized to try to squash via an injunction. This is why nobody has tried to sue Linus Torvalds over the years, and why only a few have tried to sue distributors like RedHat. Patent litigation is expensive, and you can't squeeze blood from a stone. That's why patents are not an existential threat to free software as such; they are only really a potential problem for commercialized free software, but the same is true of every other commercial endeavor. Software is not special in that regard.

With Android, though, there are multiple rich, fixed targets to go after (i.e. Google and its manufacturing partners).

However, I don't think the Oracle suit will result in royalties anywhere near $30/device. The judge in the case has indicated that Oracle's damages claims were wildly overblown, and I suspect the actual royalty will be closer to $1/device.
posted by jedicus at 6:28 AM on August 17, 2011 [1 favorite]

Here's another couple of paragraphs from Gruber's rebuttal:

I think Motorola knew they had Google by the balls. Google needed Motorola’s patent library to defend Android as a whole, Motorola knew it, and they made Google pay and pay handsomely. I don’t think it’s curious at all why Google didn’t simply license Motorola’s patents. Motorola held out for a full acquisition at a premium far above the company’s actual value, and threatened to go after its sibling Android partners if Google didn’t acquiesce. Thus the public threats from Jha and Icahn. Thus the high price. Thus the lack of a simpler, cheaper licensing agreement. Thus the unusual $2.5 billion reverse breakup fee.

That’s not to say it wasn’t a bold, brash move, or even to say it wasn’t the right move for Google and for Android as a platform. But that’s all relative to the position Google was in — and that position was a weak one, and to pretend otherwise is to deny the obvious. And don’t forget that it leaves Google in a tenuous situation with the two leading Android handset makers, Samsung and HTC. I think Apple and Microsoft probably feel pretty good, competitively, about having forced Google into spending $12.5 billion for Motorola — a handset maker with rapidly declining sales, no recent profits, and misguided management.
posted by mediareport at 6:36 AM on August 17, 2011 [3 favorites]

stop masturbating to business news.

It's more like engaging with businesses like they're sports teams. Cheer your guys and hate the other guys (Applesoft!).
posted by immlass at 6:42 AM on August 17, 2011 [2 favorites]

Android is Windows 98 all over again. The operating system may work, but in a desperate and futile effort to differentiate themselves, hardware vendors pack so much cruft and crap on top of it that it makes the experience heinous. And the effort is futile, windows PCs are commodity hardware, just like android phones are commodity phones. The only way android phones can compete against one another is on price. I don't care how many times you promise me your phone will turn me into a cyborg, when I get to the store, I'm choosing among Droid X, Samsung Charge, and HTC Whatever based on price, camera resolution, and whether it has LTE support or not. This isn't good for any of the hardware vendors because it suggests and endless race to upgrade hardware without raising price, which crushes margins.

In the PC space, the only winner was Microsoft, because they charged $80-$100 per PC. So they made money no matter which one you bought. But Google doesn't work this way. Android is basically free, but Google is forced to update it to keep up with Apple. So they have to take on more cost.

I don't see how anyone wins in all this except Apple (of course) and Microsoft. The Apple success case is so obvious it doesn't even need to be argued beyond this point: people sleep in front of their stores in the freezing cold to buy their products. Microsoft gets to choose between taking patent royalties from hardware vendors that sell Android phones, or licensing those same vendors to use WP7.X. And now with Moto in bed with Google, the other partners may, at the margins, be willing to put WP7 on more phones than they otherwise might.

The number of Android activations that Google keeps on about is irrelevant, because people turn over their phones every 18-2 years months. What will the world look like in 18 months? A new iPhone, and a flagship Nokia WP7.5 phone with several hundreds of millions of dollars of marketing behind it. And maybe, just maybe, RIM pulls its head out of its ass. Tablets? In 18 months. There will be another iPad, and Windows 8 tablets. A very tight, integrated tablet experience on the one hand, and a full blown computer in tablet form on the other.

Look at how Microsoft is differentiating itself. They are trying to compete with Apple by taking a different approach then they are. WP7 looks nothing like iOS. Windows 8 on a tablet will be a very different experience than an iPad. It may be more complicated, but it will also be more powerful. Where does this leave Android?

Everybody mocks Microsoft, because they've done a lot in the past to deserve it. But you've got to hand it to them, no one plays the long game like they do.
posted by Pastabagel at 6:52 AM on August 17, 2011 [8 favorites]

However, I don't think the Oracle suit will result in royalties anywhere near $30/device. The judge in the case has indicated that Oracle's damages claims were wildly overblown, and I suspect the actual royalty will be closer to $1/device.

My understanding is that Oracle's claim for damages is separate from a future royalties deal. Although a judge might agree with Google that the damage done to Oracle is limited, if he agrees with Oracle about the patents and then slaps an injunction on Android's use of these patents, then Google has to cut a deal acceptable to Oracle.
posted by kithrater at 6:55 AM on August 17, 2011

Is anyone else nervous about the insane amount of data they are currently compiling from users

That's a big reason to not use G+.

"Meanwhile, HTC and Samsung are shitting bricks, because they just realized that Google can now use this to beat much higher prices out of them"

It's unlikely that Google would do that. First, their big advantage over Apple is in having a wide diversity of handsets and in keeping HTC, Samsung, et al. competing against each other by producing better and better phones. Second, there is nothing keeping HTC and Samsung from switching to WP7 or WebOS. Would they want to make that switch? Obviously not, but if Google tries to strong arm them, they might feel they have no choice. The phone makers have enough options (Meego!) that Google can't get too cocky.
posted by oddman at 7:00 AM on August 17, 2011

Everybody mocks Microsoft, because they've done a lot in the past to deserve it. But you've got to hand it to them, no one plays the long game like they do.

15 years of trying to make a dent in the mobile space and either outright failing or being beaten out of the segment as soon as a half decent competitor comes up isn't playing the long game; it's outright incompetence.
posted by Talez at 7:05 AM on August 17, 2011 [10 favorites]

Ugh, the writing in that first link.

"They bid things like the distance from the earth to the sun, the number pi, and some other wacky numbers from mathematics."

No, they didn't. It wasn't as if someone bid a billion dollars, then Google responds with "well, we bid the distance from the Earth to the Sun!" and the other company just freaks out, because, clearly, the distance from the Earth to the Sun (in miles, mind you, not kilometers) is clearly more than a billion dollars. Yeesh.
posted by King Bee at 7:09 AM on August 17, 2011

Balls

Testicles! Male genitals make you better!
posted by shakespeherian at 7:11 AM on August 17, 2011

My understanding is that Oracle's claim for damages is separate from a future royalties deal. Although a judge might agree with Google that the damage done to Oracle is limited, if he agrees with Oracle about the patents and then slaps an injunction on Android's use of these patents, then Google has to cut a deal acceptable to Oracle.

There are two things going on. As mentioned above, google re-implemented a lot of Java to get around the fact that Oracle owns it. In doing so, they actually included non-trivial word-for-word copies of some elements of the Java codebase, which is all protected by copyright. That's all in the past and purely legal wrangling, as Google now knows about them and can just replace those bits (and may already have). There is also a patent claim that some of the things google's re-implemented version of java does are protected by patent, and google would need to license them in the future AND pay damages for past infringement. Patents are not just legal wrangling; there's lots of facts as google can try to invalidate or narrow some of those patents to uselessness. Buying MOT may come with patents which arguably cover the same stuff, which is good to have when making those claims, and it may improve their negotiating position for the price to those patents.
posted by a robot made out of meat at 7:12 AM on August 17, 2011

15 years of trying to make a dent in the mobile space and either outright failing or being beaten out of the segment as soon as a half decent competitor comes up isn't playing the long game; it's outright incompetence.

And yet Microsoft gets $5 from HTC every time an Andriod phone is sold. That's some failure right there.
posted by humanfont at 7:12 AM on August 17, 2011 [1 favorite]

Also, yeah $7.4B for Sun is looking cheap now isn't it?
posted by a robot made out of meat at 7:15 AM on August 17, 2011 [5 favorites]

Also, yeah $7.4B for Sun is looking cheap now isn't it?

That was Google's biggest fuck up.
posted by ryoshu at 7:23 AM on August 17, 2011 [2 favorites]

I'm curious to see what Google does with the hardware business. I can't see the other Android vendors - especially HTC and Samsung - being comfortable with their supplier competing with them.

It also puts Microsoft in an interesting position. They can do nothing, and claim that they're the only open (oh the irony) major mobile OS supplier. Alternatively, buying Nokia is the next obvious step for them so that they can get the vertical integration advantages of their competitors. And they'll pick it up for a song now that the ex-Microsoft guy running Nokia has successfully run the share price into the ground, and given Nokia nowhere else to run to.
posted by daveje at 7:26 AM on August 17, 2011

I don't care about the corporate strategy and whatnot, but those bids were FULL OF WIN.
When you have 36 billion in cash, that is exactly the kind of awesome stuff I want to see.
posted by Theta States at 7:32 AM on August 17, 2011 [1 favorite]

Everybody mocks Microsoft, because they've done a lot in the past to deserve it. But you've got to hand it to them, no one plays the long game like they do.

Well, there's still time I guess, but you have to argue that Steve Jobs has played what has been, so far, the longest and most brilliant game in the technology sector. People were writing Apple off in the early 2000s even. Now they're basically tied with Exxon.

Everyone else is always fighting the catchup battle. All of this comes down to a desperate scramble to match the iPhone by the entire mobile phone and software industry, Google included, Nokia and Microsoft and Blackberry included. Motorola was already a goner. Blackberry will be up for acquisition in short order. Nokia will follow eventually.

Love or hate Apple products, or the company, you cannot argue that their execution over the past decade has been nothing short of extraordinary, maybe the biggest business story of the decade, maybe of longer than that. And so far, they continue to stay one step ahead of everyone with both design and business acumen. Apple is sitting on enough cash to play defense, so they do, but most of their investment is in development. I mean come on, Google will never even touch in-store retail (while Apple is opening 10 stores this month), and Microsoft will never catch up in the mobile space.

It doesn't matter whether you think the iPhone sucks or the iPad is hobbled or the Macbook Air is overpriced. The market decides the question of utility and the matter of value. And the market has spoken pretty loudly in the last decade.

The experience and economies of scale and efficiency introduced by Apple's string of successes since the iPod, especially, mean that they've reached critical mass. Yeah, Android has more users than iOS. But Apple makes more money and has people locked in to a much larger ecosystem in a way that makes them, often, customers for life, willing to pay a premium for predictability and innovation of a particular flavor.

It will get really interesting when MS, Google, Nokia, HP, and maybe even Intel band together in common cause against Apple. But I think it's already too late. 1984 indeed.
posted by spitbull at 7:36 AM on August 17, 2011 [11 favorites]

Forgot Amazon, of course.
posted by spitbull at 7:38 AM on August 17, 2011

Indeed.... daveje... all IP wrangling aside, it'll be interesting to see how they do as a consumer device company. The previous Google-branded phones were both pretty cutting edge, intended to be used, more or less, as reference devices for developers. It's a lot easier to get devs on board if you can charm 'em with a fancy, modern phone you can just give away from your own inventory.

Theoretically, a new series of reference devices produced by Google / Motorola could demonstrate Android's capabilities nicely, setting a new standard for integration of hardware and software... the perception seems to be that Android has had some problems with that, especially with the extra UI layers 'n' whatnot the other manufacturers add now.

Ironically, despite all this talk of licensing and patents and whatnot, coding for open web standards has lead to some great opportunities. As a web dev who does more 'n' more mobile work, I'm enjoying all of this -- the audience for my work grows exponentially every day as these guys fight each other to get cool devices into the hands of consumers. Microsoft... Samsung... Apple... Google... they all bundle pretty spectacular little browsers that you can be assured are reasonably up to date.
posted by ph00dz at 7:39 AM on August 17, 2011

unSane wrote: Yes, paying $12bn instead of $4bn sure showed them. ::rolleyes::

$12 billion for some patents and the Motorola cell phone business doesn't seem like a bad deal at all to me. They know how to build good phones; they just need someone to help on the style front.

jeffburdges wrote: I've only owned one Motorola phone, an SLVR, the hardware seemed solid, but the software sucked royally.

You expected dumbphone software to not suck?

Anyway, I think it's funny Google is being put through the wringer for Dalvik. Android succeeds despite Java, not because of Java. And now they get to pay again for that mistake. It's completely lol-worthy.
posted by wierdo at 7:39 AM on August 17, 2011 [2 favorites]

"Applesoft"? Really? Dan Lyon seems to be making his gambit for the tin crown of always-wrong computer pundit that John Dvorak used to wear before people finally started ignoring him.
posted by Halloween Jack at 7:45 AM on August 17, 2011 [7 favorites]

15 years of trying to make a dent in the mobile space and either outright failing or being beaten out of the segment as soon as a half decent competitor comes up isn't playing the long game; it's outright incompetence.

It's 15 years (actually 14 to be precise, but let's not dwell on a few months) only if you count the initial release date for Windows CE. Don't think the first Windows-based mobiles came out before 2002; as I recall, it was all PDA's back then. I mean, until a then mysterious supplier that branded itself O2 in UK, Dupod and T-mobile elsewhere came out with XDA in Q1 2002, they really weren't Windows-based smartphones; in fact, in sheer units released, I don't think there was much traction until 2004 or so. I certainly did not make the connection between "phone" and "Windows" at least till 2003/04, when O2 XDA II Mini was released in this part of the world.

There were a lot of PocketPC-based PDA's, that was where the action was. And as I recall, MS was trouncing everyone in _that_ market (which was entirely different from mobiles); I mean, by 2005 (?) their main competitor, Palm, ended up releasing a mobile with Windows on it.

As I see it, MS really pushed into mobiles only with WinCE 6.0, and started losing marketshare not because they failed to make a dent, but because their primary market, PDA's, was so thoroughly cannibalized by mobiles. Which is not a bad thing, mind you; always had a love-hate relationship with those bricks, but to say "15 years of trying and failing" glosses over quite a bit of history.
posted by the cydonian at 7:45 AM on August 17, 2011

And yet Microsoft gets $5 from HTC every time an Andriod phone is sold. That's some failure right there.

Legalised extortion for the life of the patents! What a business model!

So playing the "long game" is deriving a revenue stream for the life of patents now? Microsoft is playing the long game but not the longlong game? Will they start playing the longlong game when ARM finally goes 64-bit?
posted by Talez at 7:45 AM on August 17, 2011 [1 favorite]

Software is math, and should not be patentable. There's your problem right there.
posted by T.D. Strange at 7:48 AM on August 17, 2011 [4 favorites]

[Quote]:

"Now that I see the break-up fee and have thought some more about the overall situation, I’ve reached the point at which I simply don’t buy the ‘protection’ theory anymore," writes Mueller.

posted by DreamerFi at 7:48 AM on August 17, 2011

As I see it, MS really pushed into mobiles only with WinCE 6.0, and started losing marketshare not because they failed to make a dent, but because their primary market, PDA's, was so thoroughly cannibalized by mobiles. Which is not a bad thing, mind you; always had a love-hate relationship with those bricks, but to say "15 years of trying and failing" glosses over quite a bit of history.

So they spent 10 years trying to get into one market, trying to leverage the convergence into another only to be forced back out a year and a half later with technology they've taken another 4 years to start even drawing level to. This isn't really an indication of success in a market.

Not to mention the stillborn that was Windows for Pen Computing, the outright flop that was Microsoft XP Tablet Edition and the Chuck Cunningham qualities of the HP Slate Windows 7 tablet.
posted by Talez at 7:52 AM on August 17, 2011

Talez So playing the "long game" is deriving a revenue stream for the life of patents now?

Well, yes. Remember, this is not a crusade, just strictly business. If Microsoft earns $5 for every HTC Android phone sold, then yes, they've played the long game pretty well for themselves and their shareholders. Or do you think that their competitors are in it for the glory?
posted by Skeptic at 7:52 AM on August 17, 2011

I think this is going to cast doubt on Page's tenure as CEO to be honest. I don't think Eric Schmidt would have done this.
posted by empath at 8:00 AM on August 17, 2011 [2 favorites]

Software is math, and should not be patentable. There's your problem right there.

Hardware is physics, by the same token.

Trivial patents and patent trolls are a huge problem, of course, though drawing a distinction on whether something's patentable or not based on whether it's implemented in hardware or software (rather than on originality or specificity) seems flawed, especially in an age when everything more complex than a tyre iron contains an ARM core and some software.Drawing such a line would effectively banish patents from most modern inventions, and lead to the consequences of not having patents (i.e., more trade secrets, fewer innovations being published).

Having said that, business model patents need to die. There's no plausible rationale for them other than regulatory capture.
posted by acb at 8:03 AM on August 17, 2011 [1 favorite]

Not to mention the stillborn that was Windows for Pen Computing, the outright flop that was Microsoft XP Tablet Edition and the Chuck Cunningham qualities of the HP Slate Windows 7 tablet.

Windows for Pen Computing never was meant to be a usable product. Its sole raison d'etre was to kill PenPoint Go.
posted by acb at 8:04 AM on August 17, 2011

This isn't really an indication of success in a market.

Didn't say it was. Am saying that MS did not participate in the mobile market in earnest in the first place, much less be successful, till about 2005/06. Mobiles were an afterthought in the MS world till HTC stopped stamping "Compaq" labels on devices it manufactured and started partnering with telecom's in UK and China.
posted by the cydonian at 8:05 AM on August 17, 2011

Software is math, and should not be patentable.

Software is a lot more like language with a really formal, constrained grammar than it is like math.

Given that most software patents seem to involve processes that are self-evident, a la "A Method For Opening A Door By Means Of Clockwise Rotation Of A Round Knob By A Muscular Appendage Of The Upper Body," they shouldn't really be granted all that often. That there are a ton of software patents seems to me to be a testament to either (a) the unfamiliarity of patent examiners with software concepts or (b) the skill of patent attorneys in making commonplace and straightforward processes sound really novel and inventive on patent applications.
posted by killdevil at 8:13 AM on August 17, 2011 [2 favorites]

It's possible that they could avoid Oracle's patents by doing ahead-of-time compilation directly into machine code, but it would be pretty hard to implement that without breaking some number of existing programs which depend on dynamic loading and runtime type introspection.

Um, what?
posted by Ironmouth at 8:17 AM on August 17, 2011

Even if that figure grows over time, it will take a long time for Google to make back the money it spent on Motorola, let alone to turn a profit.

So, pretty much like every other acquisition ever?
posted by Celsius1414 at 8:19 AM on August 17, 2011 [4 favorites]

Meanwhile they are left exposed to billions of dollars in litigation costs from Oracle.

Doesn't acquisition of Motorola bring with it Motorola's license to use Java, eliminating the exposure?
posted by anadem at 8:27 AM on August 17, 2011

This all turns on how the Google/Oracle suit progresses. Based on the publicly-released material from Sun management explicitly condoning Android it seems like Google has a better than average chance but it hinges on a court's understanding of some pretty gnarly low-level bytecode compilation issues. This is, as I understand it, genuinely unsettled case law and there's no real strong prediction of how well this will work out or if any of the patents Oracle is asserting will survive the contest.

The mere fact that nobody has any idea how any given IP law contest will shake out is evidence enough that the whole patent system is fundamentally broken and should be taken out behind the woodshed and put out of all our miseries.

My prediction: This buys Google some time in its IP wars, maybe lets them force a beneficial settlement in some of the smaller engagements. They'll keep Moto's hardware business in house long enough to pistol-whip them into shipping vanilla android, unlocking bootloaders where they can get away with it and then spin it off again to keep the other android vendors happy, keeping the patents in-house of course.
posted by Skorgu at 8:35 AM on August 17, 2011 [3 favorites]

Doesn't acquisition of Motorola bring with it Motorola's license to use Java, eliminating the exposure?

That would depend entirely on how Motorola's license was worded (and when it expires) and wouldn't be retroactive anyway.
posted by Holy Zarquon's Singing Fish at 8:40 AM on August 17, 2011

It's possible that they could avoid Oracle's patents by doing ahead-of-time compilation directly into machine code, but it would be pretty hard to implement that without breaking some number of existing programs which depend on dynamic loading and runtime type introspection.

Um, what?

Well, something like JRuby pretty much requires JITting of bytecode.
posted by Slothrup at 8:44 AM on August 17, 2011

The mere fact that nobody has any idea how any given IP law contest will shake out is evidence enough that the whole patent system is fundamentally broken and should be taken out behind the woodshed and put out of all our miseries.

That is not true. 90% of patent cases settle before a decision on the merits is reached, to say nothing of patent issues that are settled before a case is even filed. Very often the parties are quite aware of what the most likely outcome is, which prompts a settlement.

It may be difficult for us as outside observers to say with certainty what the likely outcome is, but it's not so difficult for the parties and their lawyers. Indeed, "knowing when to hold 'em and when to fold 'em" is a big part of what people pay litigators for.
posted by jedicus at 8:46 AM on August 17, 2011 [1 favorite]

Slothrup: It's possible that they could avoid Oracle's patents by doing ahead-of-time compilation directly into machine code, but it would be pretty hard to implement that without breaking some number of existing programs which depend on dynamic loading and runtime type introspection.

Ironmouth: Um, what?

Slothrup: Well, something like JRuby pretty much requires JITting of bytecode.

Its kinda neat that multi-billion dollar business lawsuits now hinge on arcane details of VMs, compilation and type reflection. Also, kinda a nightmare.
We are in the future and its messy.
posted by memebake at 8:50 AM on August 17, 2011 [1 favorite]

This is an awesome pentafecta of nerds, lawyers, finance guys, the telcom industry, and people that like fights.

And I don't mean that in the sense of cutting out people's prostates.
posted by blue_beetle at 8:56 AM on August 17, 2011 [3 favorites]

I feel like Larry Page, Steve Jobs and Steve Ballmer should have a nice sit down with Obama and get all this shit straightened out before they destroy each other.
posted by empath at 8:58 AM on August 17, 2011

Did anyone patent patent-trolling yet?
posted by memebake at 8:59 AM on August 17, 2011

Me: Did anyone patent patent-trolling yet?

n/m, Halliburton already did it.
posted by memebake at 9:02 AM on August 17, 2011 [1 favorite]

"The more you pay the more it's worth." -- Don McLean
posted by hank at 9:02 AM on August 17, 2011

So, you have four-ish very large, well funded, well advised tech corporations who are gearing up for a serious patent showdown. What are the chances that, rather than pursuing a scorched earth agenda, they collectively lobby for the much needed patent reforms?

This feels very much like the race to stockpile nukes because the other guy is stockpiling nukes, which then causes that guy to stockpile even more. Much less threat of thermonuclear global warfare though, so we got that going for us, which is nice.
posted by I Havent Killed Anybody Since 1984 at 9:03 AM on August 17, 2011 [2 favorites]

the noob writes "FOOLS! Capturing a large segment of the market when you're a late entrant by giving way stuff is a losers' game. I bet they hadn't thought that one through!"

I can't figure out if this was supposed to be sarcastic or not so in case it wasn't: This is the story of gmail. Microsoft had enough of a lock on freeish web mail that they'd started restricting HotMail with bad for users, good for Microsoft decisions. Google blew that wide open by not only rolling back those anti-user changes but also by giving away more storage (and to this day delivering on the promise to continuously increase the storage space) than Microsoft was making available for a fee.
posted by Mitheral at 9:07 AM on August 17, 2011

They've always been stockpiling. Its just that Apple has decided to press the nuclear button a few times this year and everyone is preparing for war. I'm not sure why it would be remotely in Apple's interest to reform the current IP process. They can shut down competitors with nothing more than "look and feel" trademarks and trivial patents. I can't imagine most people being confused by a Samsung Android Tablet and thinking its an iPad, but Germany shut down sales for this very reason.
posted by damn dirty ape at 9:07 AM on August 17, 2011 [1 favorite]

What are the chances that, rather than pursuing a scorched earth agenda, they collectively lobby for the much needed patent reforms?

Well, a lot of this may be a moot point soon, since the Federal Circuit is getting very close to declaring software unpatentable per se: "merely claiming a software implementation of a purely mental process that could otherwise be performed without the use of a computer does not satisfy the machine prong of the machine-or-transformation test."
posted by jedicus at 9:08 AM on August 17, 2011 [4 favorites]

That is not true. 90% of patent cases settle before a decision on the merits is reached, to say nothing of patent issues that are settled before a case is even filed. Very often the parties are quite aware of what the most likely outcome is, which prompts a settlement.

I think that supports my position actually unless I've grossly misunderstood something. If you know beforehand how a case will go why would you waste money bringing it to trial? Cases are brought and once it becomes clear how well the judge/jury understands the evidence it becomes preferable to settle.

These things hinge on extremely technical points being understood by non-technical lawyers, judges and juries, I am unconvinced that's predictable in any meaningful sense.
posted by Skorgu at 9:18 AM on August 17, 2011 [1 favorite]

It's just business, and it becomes pretty tiring to see the fanbois on both sides cheering on their favourite CEOs as if they were sports stars or politicians.

And this thread is still going why?
posted by philip-random at 9:24 AM on August 17, 2011

I can't imagine most people being confused by a Samsung Android Tablet and thinking its an iPad, but Germany shut down sales for this very reason.

And no patents are involved (yet) in that particular lawsuit. Apple's arguments for obtaining the preliminary injunction were that the Samsung Galaxy Tab 10.1 and its packaging looked too similar to Apple's products and its registered designs. Registered designs, called "design patents" in the US, are a very different beast to the usual "utility" or invention patent: they protect the look of a product, and are actually closer in concept to trademarks than utility patents in that they don't aim to protect technical innovation, but rather the distinctiveness of products from copycats.

The protection offered by registered designs is pretty narrow, especially if the shape of protected product is distinctive enough. This is also why Apple has also argued that the Samsung tablet is a "slavish copy". This is a different prong in its attack, based on European competition law, rather than IP: marketing a slavish copy of a competitor's product, even if the product is not protected by any sort of IP, is considered unfair competition as it exploits the competitor's goodwill.
posted by Skeptic at 9:27 AM on August 17, 2011

The protection offered by registered designs is pretty narrow, especially if the shape of the protected product is not distinctive enough, sorry
posted by Skeptic at 9:29 AM on August 17, 2011

It's more like engaging with businesses like they're sports teams. Cheer your guys and hate the other guys (Applesoft!).

It's dumb, but it seems less dumb than putting that same energy into following and cheering for the Boston Red Sox or the Miami Heat. At least the Google/Apple games have some real-world impact and significance.
posted by straight at 9:32 AM on August 17, 2011 [3 favorites]

At least the Google/Apple games have some real-world impact and significance.

The millions of Red Sox and Heat fans might take issue with your conclusions.

Sometimes things are significant *because* people pay attention to them, not despite.
posted by Celsius1414 at 9:36 AM on August 17, 2011

Motorola couldn't drag Apple to the grave with their crappy processors, but maybe they'll finish off Google.

The dollars show this is clearly an all-in move out of desperation. If this doesn't work, Google shareholders will leave in droves.

Perhaps the only way this could work for Google is if they do what Apple did in 1997 and cut off all clone makers (HTC, Samsung, etc.), using Motorola to make Google-branded hardware that finally provides a consistent and high-quality user experience equal to what iOS provides.

Google would basically be building the Android market up from scratch again, just like Apple had to when they were at the point of going under.

Maybe it'll work and Google will still be in the mobile business in five years. It's pretty risky to bet the entire company on Android, but then they don't really have a choice.
posted by Blazecock Pileon at 9:42 AM on August 17, 2011 [1 favorite]

If you know beforehand how a case will go why would you waste money bringing it to trial?

That's just it: the vast majority of cases don't go to trial precisely because the likely outcome is known beforehand. Trials generally only happen for two reasons:

1. When the expected value of a verdict exceeds the expected value of a settlement (i.e. when one or both parties think it's worth the risk). This is typically because either the plaintiff is shooting for a long-odds payoff or because the parties disagree about the law or facts.
2. When one or both parties want to push a point in order to develop the law. This is more common among repeat players and public interest groups (e.g. the Myriad genetics case).

Cases are brought and once it becomes clear how well the judge/jury understands the evidence it becomes preferable to settle.

No, many times claims settle before a case is even filed or before anything of substance occurs in a case. And settlement is usually triggered not by "how well the judge/jury understands the evidence" but rather by the results of discovery, claim construction hearings (more on that later), evidentiary hearings (i.e. what is admissible and what isn't), and other pre-trial motions.

These things hinge on extremely technical points being understood by non-technical lawyers, judges and juries, I am unconvinced that's predictable in any meaningful sense.

No, actually, they don't. First, patent litigators are very often technical people. Second, most patent litigation (and all patent appeals) occurs before judges that have seen many, many other patent cases. And there is a test program being formed that would further consolidate patent litigation among a subset of trial judges.

As for the juries: the jury's role is limited to issues of fact, which are often non-technical issues like judging witness credibility. And we trust juries in lots of other technical cases: toxic tort litigation, securities litigation, criminal cases that depend on forensics, etc. The parties can also agree to a bench trial (i.e. a trial before the judge only), and they often do.

Furthermore, the single most important part of any patent case is claim construction (i.e. determining what exactly the claims cover), which is a matter of law handled by the judge and decided before the trial begins. It is often the case that once the claim construction is decided, the writing is on the wall. Settlement after claim construction is a common pattern in patent litigation.
posted by jedicus at 9:45 AM on August 17, 2011

I can't imagine most people being confused by a Samsung Android Tablet and thinking its an iPad, but Germany shut down sales for this very reason.

I can imagine a lot of Christmases ruined by well-meaning relatives having bought Samsung Android Tablets as gifts ("It's just like an iPad, right?")
posted by acb at 9:55 AM on August 17, 2011 [4 favorites]

King Bee : No, they didn't.

Umm, yes, they did.

It wasn't as if someone bid a billion dollars, then Google responds with "well, we bid the distance from the Earth to the Sun!"

True. Someone bid 90 million, and Google countered with $92,955,887.

Which leads to two scenarios (which likely both happened, in order, after a few such bids):
1) Their opponents don't "get" it, and waste energy trying to figure out how Google arrived at that value.
2) Their opponents do get it, and sweat bullets wondering how high Google will go to keep the joke running.

Either way, Google wins without winning.

and the other company just freaks out, because, clearly, the distance from the Earth to the Sun (in miles, mind you, not kilometers) is clearly more than a billion dollars.

Not because "gosh, big number" (though rather a bit less than a billion), but because "these bastards have committed to paying billions of dollars just to mock us, and may not even care about winning!"
posted by pla at 10:01 AM on August 17, 2011 [2 favorites]

Which would hand Microsoft the mobile market on a silver platter.

I don't know. Android already has mindshare and seems cool. Lord knows what all that fancy computer animation and metallic android voice stuff in Google Android/Motorola Droid ads actually means for using the damn phone, but it sounds awesome.

It's just that the hardware is inconsistent and tends on the suck side (with a couple bright spots) particularly with the manufacturers and carriers like locking down their Android phones on behalf of end users, so that the users are stuck running whatever 1.x version of Android was released a couple years ago.

Even if it would clash with the "open" marketing campaign, Google should have specified better and narrower rules to HTC et al. for running Android, right from the start.

They didn't, and now they're stuck buying Motorola. It's a tough row to hoe — I almost feel sorry for them.
posted by Blazecock Pileon at 10:02 AM on August 17, 2011 [1 favorite]

I can imagine a lot of Christmases ruined by well-meaning relatives having bought Samsung Android Tablets as gifts ("It's just like an iPad, right?")

This is where I chime in with "first world problems" right?
posted by blue_beetle at 10:04 AM on August 17, 2011 [1 favorite]

Now HTC is suing Apple for all the things.
posted by ryoshu at 10:04 AM on August 17, 2011

"merely claiming a software implementation of a purely mental process that could otherwise be performed without the use of a computer does not satisfy the machine prong of the machine-or-transformation test."

If this actually becomes the standard for patentability I predict an awesome unintended consequence: expert witness mentats. If your competitor claims a patent on a complex data compression algorithm, for example, you'll be able to invalidate it by putting Thufir Hawat on the stand, wacked out of his mind on Sapho juice, and asking him to compress long, arbitrary bit strings in his head.
posted by The Tensor at 10:08 AM on August 17, 2011 [9 favorites]

Essentially, no one can make anything but a trivial OS without getting hammered by obvious patents. Dismiss all the fanboyisms and financial prophecy, and you'll come to this sad reality. No wonder we have to import coders from East Asia. Americans see this shit and think "I'm better off in business school or law school." Software patents need to go.

Really, replace OS with "software program" and you're probably closer to the reality. To me, this is best demonstrated by Slothrup's comment above: "Disclaimer: as a Microsoft employee, I'm forbidden from reading any patents -- so I have no idea what Oracle's patents claim to cover." I cannot discuss my own employer, but policies of "don't read patents, don't think about patents, don't talk about patents, and for the love of god, don't email about patents" seem to be the norm in most tech companies, since knowing infringement is often far worse than unknowing infringement. That's an incredible inversion of the patent system.

You see, patents were originally intended to be a bargain: you publish the full documentation of your invention, in enough detail that anyone skilled in your art can reproduce it, and in exchange you get a period of exclusivity, all to "promote the Progress of Science and useful Arts." Yet the majority of practitioners in the software field don't look at patents or learn from them in any way. The only time I've seen developers look at patents is when they are filing one for their employer. I've never ever heard a software engineer say "you've got to check out this patent; it totally explains how they did this." Or "this landmark patent represents a major discovery in the field."

The system doesn't reward innovation anymore; it simply provides means for massive players to bully any tiny startup they don't like out of existence with the mere threat of a patent suit.
posted by zachlipton at 10:11 AM on August 17, 2011 [14 favorites]

The dollars show this is clearly an all-in move out of desperation. If this doesn't work, Google shareholders will leave in droves.

The dollars show exactly the opposite.

Google is sitting on 33 billion in cash and short term investments. They are bringing in approximately 8 billion in profit per year. Some estimates put that number as high as $39 billion. They have only $4 billion in outstanding debt. The problem for google is that they have too much money.

This is a moderately big move. Think of it this way--from all appearances this is a straight cash deal. If it was a desperation move, they would be merging and using stock. They have tons of cash.
posted by Ironmouth at 10:12 AM on August 17, 2011 [4 favorites]

I can imagine a lot of Christmases ruined by well-meaning relatives having bought Samsung Android Tablets as gifts ("It's just like an iPad, right?")

If they knew they weren't buying an iPad then what's the problem? I mean, are we seriously debating the possibly of destroying companies, sending thousands into unemployment, hurting the economy over potentially having some kid disappointed on xmas? I'm sure if it was your job on the line, you'd be a bit more carful about jumping on the 'frivolous IP lawsuits are great' bandwagon.

Regardless, I'd like to see a long well-researched double-blind study that proves any of this. Handing a judge some photos of an ipad and a resized Tab isn't proof, its posturing and Apple and the rest know it. They know how to win cases, facts and truth are secondary to this.
posted by damn dirty ape at 10:17 AM on August 17, 2011 [2 favorites]

Attention MetaFilter users: No smoking around the giant straw man that damn dirty ape has constructed, please. If that thing goes up, we're all doomed.
posted by entropicamericana at 10:20 AM on August 17, 2011 [2 favorites]

If this doesn't work, Google shareholders will leave in droves.

So there are the same number of shares outstanding regardless of how well loved or hated Google is. And Google's profits don't have any connection to what its stock price is. Although presumably one hopes the markets are sufficiently efficient so that Google's market cap won't dip below the value of its assets like, say, Yahoo.

Also, hey, the head of iAds quit. Because ads are hard or something.
posted by GuyZero at 10:21 AM on August 17, 2011

This doesn't seem like that bad of an investment on Google's part:

Earlier this year, Carl Icahn, Motorola’s largest shareholder, estimated that the patent portfolio alone could be worth $4 billion. In June, Apple, Microsoft, and RIM banded together to acquire 6,000 patents from Nortel and keep them out of Google’s hands: the pricetag on that acquisition was $4.5 billion. This means that the consortium had paid about $750,000 per Nortel patents. If you were to apply the same number to Google’s acquisition of the Motorola patent portfolio, the price tag would be $12.75 billion. It is interesting to see how this number is extremely close to what Google ultimately offered for Motorola.

But it gets better…

Motorola Mobility, the unit Google is acquiring, has $3 billion in cash on hands, reducing the price of the overall deal to $9.5 billion and dropping the per patent price to just under $560,000 per patent, assuming none of the filed patents are accepted or under $390,000 per patent if you assume that Motorola will get all 7500 filed patents approved.

… and realize this is all based on a $0 valuation of the rest of Motorola’s assets.

So what’s in there? In order to get a better understanding, one just has to look at some of the patent-related lawsuits Motorola has filed in the mobile space. For example, last October, they assessed that Apple had violated 18 specific patents in areas like WCDMA, GPRS, 802.11, wireless email, location based services, device synchronization, etc… The next month, they sued Microsoft around things like an online marketplace, map services, video coding, etc…

So MMI is really only costing GOOG around 9 billion, and at the rate the patent wars are heating up GOOG could probably flip the patents, assuming they get nothing for the other MMI holdings, for a profit in a couple years if it came to that.
posted by mullingitover at 10:21 AM on August 17, 2011 [6 favorites]

I think the typical line of thought is that they would liquidate the hardware business and retain the patents.
posted by GuyZero at 10:23 AM on August 17, 2011 [1 favorite]

So MMI is really only costing GOOG around 9 billion, and at the rate the patent wars are heating up GOOG could probably flip the patents, assuming they get nothing for the other MMI holdings, for a profit in a couple years if it came to that.

Brilliant analysis.
posted by Ironmouth at 10:26 AM on August 17, 2011

GuyZero: "I think the typical line of thought is that they would liquidate the hardware business and retain the patents."

That would be a damn shame. They shouldn't touch MMI at all, they should let them continue to keep working and researching to ensure that MMI can keep cranking out new patents. Why kill the goose that laid all those golden eggs?
posted by mullingitover at 10:27 AM on August 17, 2011 [1 favorite]

Ahh, I misunderstood what you meant by settling. Yes, if most cases are settled before any trial whatsoever that does indeed argue for predictability (or simply sheer size difference between the two parties). I was interpreting it to mean starting a trial and then settling once the trend became clear.

These things hinge on extremely technical points being understood by non-technical lawyers, judges and juries, I am unconvinced that's predictable in any meaningful sense.,

No, actually, they don't. First, patent litigators are very often technical people. Second, most patent litigation (and all patent appeals) occurs before judges that have seen many, many other patent cases. And there is a test program being formed that would further consolidate patent litigation among a subset of trial judges.

This may be true in general IP cases but most of the patents being argued for in the Oracle/Google slapfight are absolutely laughably trivial. I mean 06061520 is basically memoize(). 05966702 is gussied-up with fancy 'class file' talk but it's as complicated as "find all the constants, stick them over there and replace where they were with a pointer." This makes just as much sense as patenting "a method of stacking two blocks on top of each other" and that they're not thrown out as quickly as that would be does not speak highly of the technical competence of anyone making decisions in the process.
posted by Skorgu at 10:29 AM on August 17, 2011 [4 favorites]

Motorola Mobility, the unit Google is acquiring, has $3 billion in cash on hands

That makes a huge difference, right? Why did none of the other pundits mention this so far? Is it wrong, or is it just a hard to find bit of info?
posted by memebake at 10:30 AM on August 17, 2011

That would be a damn shame. They shouldn't touch MMI at all, they should let them continue to keep working and researching to ensure that MMI can keep cranking out new patents. Why kill the goose that laid all those golden eggs?

You're right. I don't think it's a great plan, bu tit's out there as one of many options if they don't want to be in the hardware business.

And yes, MMI did have $3B in the bank. It's easily verified by looking at their most recent quarterly financial report.
posted by GuyZero at 10:33 AM on August 17, 2011

I think the typical line of thought is that they would liquidate the hardware business and retain the patents.

One would assume they would sell the copyrights and the name to a firm that would put "Motorola" on their handsets. So there's goodwill value there.

But the idea that this is some sort of desperation play isn't supported by the numbers. Google has a pile of money and that money isn't making money, so to speak. That's part of the larger problem in this economy is that all of these companies are sitting on cash.
posted by Ironmouth at 10:34 AM on August 17, 2011 [1 favorite]

Motorola Mobility, the unit Google is acquiring, has $3 billion in cash on hands

That makes a huge difference, right? Why did none of the other pundits mention this so far? Is it wrong, or is it just a hard to find bit of info?

Journalism today is incredibly shoddy.
posted by Ironmouth at 10:36 AM on August 17, 2011 [5 favorites]

That's part of the larger problem in this economy is that all of these companies are sitting on cash.

Yes. For all you Apple-ites out there, why isn't Apple doing anything with its $28B in cash and short-term assets? There are plenty of reasons for Apple to have cash on hand, but $28B is a bit much. I'm not one of those crazy people who is going to start frothing on about a dividend for a growth stock, but they could do something. It's a lot of cash and it's a definite opportunity cost.
posted by GuyZero at 10:39 AM on August 17, 2011

Microsoft Mission Statement:
At Microsoft, our mission and values are to help people and businesses throughout the world realize their full potential

Apple Mission Statement:
Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

Google Mission Statement:
Google’s mission is to organize the world‘s information and make it universally accessible and useful.

Who's playing the longest game?

(this is a good sport)
posted by memebake at 10:42 AM on August 17, 2011 [2 favorites]

Yes. For all you Apple-ites out there, why isn't Apple doing anything with its $28B in cash and short-term assets?

They're making money hand over fist. They can't make strategic acquisitions fast enough.

Or you could do a Cisco and look at all that cash burning a hole in your wallet, blow half a fucking billion on a shitty company like Flip and then write off your investment two years later.
posted by Talez at 10:43 AM on August 17, 2011 [5 favorites]

Apple has like $72B on hand.

Also, what Talez said.
posted by entropicamericana at 10:44 AM on August 17, 2011 [1 favorite]

AAPL has $47B in long-term investments and $28B in short-term and cash. Forget the long-term stuff. They literally have a huge bag containing $28B in loose change that they can't be bothered to bring to their nearby Coinstar.
posted by GuyZero at 10:47 AM on August 17, 2011

I can imagine a lot of Christmases ruined by well-meaning relatives having bought Samsung Android Tablets as gifts ("It's just like an iPad, right?")

Since when is that illegal? That's zero justification for a ban on Samsung Galaxy Tab sales.
posted by kmz at 10:58 AM on August 17, 2011 [2 favorites]

Since when is that illegal? That's zero justification for a ban on Samsung Galaxy Tab sales.

Also, it is just like an iPad. So screw those kids.
posted by Holy Zarquon's Singing Fish at 11:03 AM on August 17, 2011

By definition short-term investment and cash is comprised of:

a) cash
b) investments in highly liquid & stable securities, almost always US t-bills

AAPL doesn't have a savings account at B of A. Cash generates zero return. T-bills currently yield... 0.2% or something.

I understand they need cash on hand for lots of reasons. And I've already said that we can ignore their long-term investments, although I think they have too much there too. But AAPL isn't a money-market fund, although you might not realize that looking at their balance sheet. One of Vanguard's money-market fund has $113B under management (VMMXX). AAPL has $75B. And they're invested in roughly the same assets.

Seriously, if their investments are so great, why keep building iPhones? oh yeah, right, because that's orders of magnitude more profitable.
posted by GuyZero at 11:08 AM on August 17, 2011 [1 favorite]

The Man Behind Android's Rise
posted by kliuless at 11:09 AM on August 17, 2011

GuyZero: "AAPL doesn't have a savings account at B of A. Cash generates zero return. T-bills currently yield... 0.2% or something.
"

When you account for inflation at 3%, Apple is wasting something like, oh, I dunno, more money than all of us will ever earn in our lives every year by sitting on it.
posted by mullingitover at 11:16 AM on August 17, 2011 [1 favorite]

They literally have a huge bag containing $28B in loose change that they can't be bothered to bring to their nearby Coinstar.

That word, it does not mean...
posted by Halloween Jack at 11:27 AM on August 17, 2011 [4 favorites]

Siegler's piece mentions this future for MMI:

Just look at the issues Google has been having keeping their carrier and OEM partners in line when it comes to Android software updates. The issues have gotten so bad that Google had to get on stage at their I/O conference this year and promise everyone that a new initiative is underway to ensure timely updates. You’ll notice we haven’t heard a thing about that initiative since it was unveiled. ”Over the next few weeks, we’ll figure it all out,” Android head Andy Rubin said at the time. It’s been three months.

But with Motorola in their back pocket, Google now has another stick to use when the carrots don’t work. And the carrots rarely do in the Android ecosystem, it seems.

And also, if the FPP article was actually written by anyone beside Lyons, I might actually give it some credibility, but that guy has been wrong more times than right.

As for Google's other actions on this? All the signs point to this being a last minute scramble by the smart kid who never had to really fight for something for once. Gruber and Siegler make points that pretty much google needed something, anything, and fast. The guys at MMI were smart enough to make sure they got money on this deal either way ($2.5 billion breakup agreement? Wasn't AT&T/TMobile's something like 360 Million, and for a shakier purchase than one of MMI).

I think what this is really showing is Google's youth when it comes to these fights and battles. They thought they could give something away for free and change how the carriers were acting, only to realize that they had no way to actually control these other multibillion dollar industries. They are getting their nose bloodied for the first time, and now they are realizing that things aren't as easy anymore. As Brian S Hall vulgarly put it: Google Are Pussies.
posted by mrzarquon at 11:27 AM on August 17, 2011

That word, it does not mean...

I often bike by AAPL HQ on weekend when I go through Cupertino up into the hills. (Anyone climbed Redwood Gulch Rd lately?)

There's a gigantic bag of change that's probably... I dunno, 20, 30 feet wide sitting in a parking lot on Infinite Loop. I guess it's 15-ish feet high. Not as high as a streetlight. You can see it from De Anza. There's usually a guard or two around somewhere.

Do you Apple fan-people not know this?
posted by GuyZero at 11:31 AM on August 17, 2011 [6 favorites]

Wait, Carl Icahn was Motorola's largest shareholder? That bastard ruins everything. He won't be happy until we drive our Google to the Google to pick up more Google. (Substitute whatever CompuHyperGlobalMegaNet to which he is advocating a sellout this time)
posted by mkb at 11:35 AM on August 17, 2011 [1 favorite]

This makes just as much sense as patenting "a method of stacking two blocks on top of each other" and that they're not thrown out as quickly as that would be does not speak highly of the technical competence of anyone making decisions in the process.

It's not enough to look at a patent and say "As a technically competent person, this look obvious to me. Toss it." The precise scope of the patent must be determined through claim construction, then prior art must be considered to determine validity (determining obviousness is where the experts come in), then the patent must be compared to the allegedly infringing product. This takes both effort and time, not least because the courts and the Patent Office have a significant backlog.

If you can quickly and reliably find killer prior art for patents then there's a bright future for you as a patent litigator. It's harder than you might think.
posted by jedicus at 11:39 AM on August 17, 2011

Let's assume a patent somehow got approved for, literally, "a method of stacking two blocks together" and the holder sued every bricklayer in Chicago. How long would it take a court to rule on that?
posted by Skorgu at 11:51 AM on August 17, 2011

why isn't Apple doing anything with its $28B in cash

Maybe Steve wants to put a money pool in his new house and or spaceship/campus.
posted by the_artificer at 11:59 AM on August 17, 2011

Let's assume a patent somehow got approved for, literally, "a method of stacking two blocks together" and the holder sued every bricklayer in Chicago. How long would it take a court to rule on that?

Patents are presumed valid by statute, and the patent clearly reads on the infringing activity, so it's not a frivolous claim. It would probably die at the summary judgment stage. In the Northern District of Illinois that could take well over a year.

Alternatively it could be thrown into reexamination at the Patent Office, which could take considerably longer (two to four years, with another two to four years if the reexam is appealed to the BPAI, with another year or two if the BPAI decision is appealed to the Federal Circuit, and another year or two if the Federal Circuit decision goes to an en banc rehearing and/or the Supreme Court). Any litigation would typically be stayed pending the reexamination.
posted by jedicus at 12:08 PM on August 17, 2011 [2 favorites]

jedicus That's...appalling. Good god, scrap it all and start over.
posted by Skorgu at 12:14 PM on August 17, 2011 [2 favorites]

It all makes sense when you realize we don't have a patent system, we have a barrier to entry system.
posted by mullingitover at 12:16 PM on August 17, 2011 [6 favorites]

That's...appalling. Good god, scrap it all and start over.

Well, if you scrap the presumption of validity (or at least lower the burden of proof), give the Patent Office the necessary resources to eliminate its backlog and properly examine patents in the first place, and hire the federal judges necessary to eliminate the judicial backlog, then the typical case pendency could be dropped to just a few months. And it can't really get much shorter than that because due process requires giving each side a certain amount of time to respond to motions.
posted by jedicus at 12:23 PM on August 17, 2011 [2 favorites]

Well yeah but the system seems to be structured to ensure that none of those things happen.
posted by Skorgu at 12:30 PM on August 17, 2011

Considering that most politicians don't want to spend money to fix roads it's unlikely that they'll give the US Patent office the Iraq-war-funding-levels it needs to operate properly.
posted by GuyZero at 12:35 PM on August 17, 2011 [2 favorites]

Remember Motorola partnered with Apple to bring iTunes to phones and gave us the Rokr. Apple gave up after 1.0 and decided they could make more money just making their own phones, which proved to be a very good business decision.

I've always thought of this as Apple partnering with Motorola to do this, in order to learn about working with cellphones and mobile telecoms, then kicking them to the curb as soon as possible so they could do their own phones. Though in retrospect, maybe the point of the exercise was to identify top talent and players in Motorola's cell phone division, so that they could later be wooed to work for Apple.
posted by ZeusHumms at 12:44 PM on August 17, 2011 [3 favorites]

Considering that most politicians don't want to spend money to fix roads it's unlikely that they'll give the US Patent office the Iraq-war-funding-levels it needs to operate properly.

The Patent Office is funded through user fees, not tax dollars, and most years it sends excess money to the Treasury. All it needs is the authority to set its own fees.
posted by jedicus at 12:48 PM on August 17, 2011 [1 favorite]

with another year or two if the BPAI decision is appealed to the Federal Circuit, and another year or two if the Federal Circuit decision goes to an en banc rehearing and/or the Supreme Court). Any litigation would typically be stayed pending the reexamination.

Two years at the Federal Circuit? Wow. My employment cases go through quickly, apparently. Do they appoint a special master to find facts or something that increases the time line?
posted by Ironmouth at 12:53 PM on August 17, 2011

The Patent Office is funded through user fees, not tax dollars, and most years it sends excess money to the Treasury. All it needs is the authority to set its own fees.

On one hand I like this idea, on the other hand raising the cost of patents to millions of dollars isn't necessarily going to solve more problems than it creates.
posted by GuyZero at 12:57 PM on August 17, 2011

jedicus That's...appalling. Good god, scrap it all and start over.

No kidding. Software patents have become such a ludicrous quagmire, such an unpredictable pit-trap obstacle to getting anything done, such a colossal waste of time and money, that I've become convinced that we would be better off abandoning the patent system entirely - all patents, in all fields, let's just get rid of all of it.
posted by Mars Saxman at 1:21 PM on August 17, 2011 [2 favorites]

I can imagine a lot of Christmases ruined by well-meaning relatives having bought Samsung Android Tablets as gifts ("It's just like an iPad, right?")

Thankfully no. It's different, and some of prefer it. Get you want, get what you need. That's all it means.
posted by juiceCake at 1:26 PM on August 17, 2011

There is an opportunity to bypass any patents Oracle owns through Sun's acquisition of HotSpot by doing more ahead-of-time optimization, i.e. bytecode contains optimization tips usually generated by the HotSpot JIT recompiler.

I'd imagine the LLVM will eventually make that sort of thing commonplace for other languages, i.e. compile and run your C++ code using some profiling plugins which produce profiling data that improves the performance for both the compiler and the compiled code in future.
posted by jeffburdges at 2:01 PM on August 17, 2011

Two years at the Federal Circuit? Wow. My employment cases go through quickly, apparently. Do they appoint a special master to find facts or something that increases the time line?

Hmm...my impression was that the Federal Circuit was slower than it actually is. Evidently they manage about 11.3 months from docketing to disposition for patent cases. Kudos to them, then. Still, that's nearly a year, and there are outlier cases that take much longer. I looked up the numbers for reexam and BPAI appeals, so those are solid. I'll admit that the Supreme Court figure was also an educated guess.

If that 11.3 months is still longer than your employment cases, my guess is that part of the delay is that patent cases tend to attract amici like flies and another part of it is that the factual records are often quite long (giant patent application prosecution histories and so forth).
posted by jedicus at 2:12 PM on August 17, 2011

Microsoft gets to choose between taking patent royalties from hardware vendors that sell Android phones, or licensing those same vendors to use WP7.X. And now with Moto in bed with Google, the other partners may, at the margins, be willing to put WP7 on more phones than they otherwise might....What will the world look like in 18 months? A new iPhone, and a flagship Nokia WP7.5 phone with several hundreds of millions of dollars of marketing behind it.

As I've argued elsewhere, I think that while the Nokia/WP7.x stuff may be an impressive, well-marketed, and initially successful offering, the market is going to come under the influence of the same forces that made hardware a commodity for PCs. As you say, that's probably going to leave vendors like Apple who make whole (and desirable) widgets in a strong position.

But for Microsoft and Nokia? I don't think so. It's easy to see why for Nokia, they've essentially given away control of their product destiny and they're left in the commodity business. It's less clear for Microsoft, but in my opinion, as the hardware competition drives margins for the whole for the whole product smaller and smaller, those whose business model depends on revenues from the software are going to be at a disadvantage next to those who've got a model where they can give it away. I think the end result for MS is going to be:

* they accept marginal status as a mobile OS vendor and/or exit
* they buy Nokia and try the whole-widget model
* they shift their model from software licensing to patent licensing (with or w/o Nokia)
posted by weston at 2:26 PM on August 17, 2011

I don't see why Android OEMs would be put out by Google's purchase of Motorola. With the MMI patent arsenal in Google's corner, and Google using that arsenal to protect Android OEMs from patent threats, it basically amounts to Google paying the patent license fees on their behalf. If I were running Samsung or HTC I'd be pretty grateful, and optimistic about working with Google in the future. At the same time I'd be feeling pretty bitter toward Microsoft, and not inclined to work with them. If anything I'd want to compete against them hard, dominate them in market share, and generally crush their dreams.

I think Microsoft will end up buying Nokia. Running the full stack is pretty much their only chance to avoid having WP7 turn into Zune 2.0.
posted by mullingitover at 2:54 PM on August 17, 2011

Perhaps the only way this could work for Google is if they do what Apple did in 1997 and cut off all clone makers (HTC, Samsung, etc.), using Motorola to make Google-branded hardware that finally provides a consistent and high-quality user experience equal to what iOS provides.

So that they'd be chasing after Apple in the high-end consumer electronics market niche in which Apple has overwhelmingly demonstrated a core competency time and again instead of aggressively taking away market share from the low hanging fruit of Microsoft, Blackberry, and RIM? Sounds brilliant.

The only thing Google absolutely had to achieve for long term survival was keeping from getting locked completely out of mobile advertising and search; done and done. Anything else is bonus.

They've actually done a pretty good job for the latest entrant to the market. More to the point, I think they've had a deliberate strategy to accelerate the commoditization of the whole market segment as a strategic move against Microsoft & Apple.

They're also in a position to potentially do an end run around the telecom oligopoly whose restrictions hurt their core business the most in the mobile space. One disruptive technology (such as the multi-antenna mobile wireless Shannon's law dodge) could be exploited to upend the entire cellular industry, and not being tied to a bunch of existing telecom contracts or hardware licenses would give them a great advantage (which strategy the Motorola deal might weaken).

Undoubtedly they've made missteps and will make more, but given their late entry and weak starting position in the mobile space I'm pretty sure this was fairly close to the optimal path open for them. The long term prospects for stepping on their own dick aren't related to IP issues or UI quality vis-a-vis Apple, but rather the same saga that's played out at big companies like IBM, Microsoft and Apple for a long time. Which is that they will probably miss out on the next huge revolutionary high ROI product or service because it distracts from or cannibalizes their search/advertising cash cow. When you are a big enough company that you can clear the barrier to entry hurdles in any market space your biggest threats become internal first and foremost.
posted by BrotherCaine at 4:12 PM on August 17, 2011 [2 favorites]

When I said IBM, Microsoft and Apple I should have said Apple(-Jobs). One thing he's been very good at is focusing on cutting the things that aren't the next big thing at Apple even if they were once sacred cows.
posted by BrotherCaine at 4:17 PM on August 17, 2011

What's the total investment going to be for Google into Andriod. The Moto buy puts them in for 9 billion dollars. Mobile search is worth a lot, but is the money going to end up with FourSquare, Twitter, Facebook and Yelp? There isn't a lot of value in the factoid web search that mobile users are into. The keyword google makes most of it's revenues from are things like local services (e.g. A plumber), not who was in that movie, or some Wikipedia entry. On phones people are often using apps for those things, not Google. The other thing people are searching for seems to be hey what's going on where I am. Twitter owns that. Go to a concert or a game, or a conference and you search hashtags, not Google.

Google is trapped in Andriod like some gambler down big at the tables who is trying to win it all back. They are going to end up like Cisco and Yahoo soon. Eventually web search is going to stop getting bigger, as local companies move elsewhere. Google doesn't seem well positioned for this fight. Android isn't going to help in its current state.
posted by humanfont at 5:40 PM on August 17, 2011 [1 favorite]

"More to the point, I think they've had a deliberate strategy to accelerate the commoditization of the whole market segment as a strategic move against Microsoft & Apple."

Excellent point. The day when smartphones are not only ubiquitous but damn near disposable is fast approaching and those phones will be packed to the gills with Google products (and the accompanying ads). Virgin is now selling a MOTO smartphone with a $35 unlimited data, text and 300 talk minutes plan ($55 unlimited everything). There's always a market for premium phones like the iPhone or the N9 but the future is going to belong to the cheap and powerful smartphone.
posted by MikeMc at 6:23 PM on August 17, 2011

When Google Met Moto: California Programmers Pair With Illinois Engineers

The employees—About 20,000 at Motorola Mobility and nearly 29,000 at Google—will have to get used to each other. One former Motorola product manager noted that "Over time, the [Motorola] engineers have been so beaten down. A Google employee starts dictating and that won't be taken well at all."...

One former Android executive boasted that Google employees has [sic], on average, 20 IQ points more than their Motorola counterparts.
posted by Blazecock Pileon at 6:37 PM on August 17, 2011

Blazecock Pileon: "One former Android executive boasted that Google employees has [sic], on average, 20 IQ points more than their Motorola counterparts."

Did you just pull that out of your ass? Because it's nowhere to be found in the article you linked.
posted by mullingitover at 8:23 PM on August 17, 2011

Mobile search is worth a lot, but is the money going to end up with FourSquare, Twitter, Facebook and Yelp? There isn't a lot of value in the factoid web search that mobile users are into.

Google has a very, very good idea what mobile search is worth. And if you don't have the figures at hand yourself then you may be able to estimate them by looking at where GOOG is investing its cash.
posted by GuyZero at 8:30 PM on August 17, 2011

Ah, I see you're just copying verbatim from Daring Fireball without reading the article. It looks like WSJ altered the copy without noting it, which isn't terribly shocking coming from a Murdoch newspaper.

But anyway. The article also mentions that Motorola lost 86 million dollars last year. Google could easily just fire everyone except the R&D division and still get everything they want from the deal, and Motorola would be smart to remember that. They're not buying the business because they need 20,000 more employees.
posted by mullingitover at 8:30 PM on August 17, 2011

No, that "20 IQ point" line was in a real article. It's attributed to an anonymous former Android executive. It's pretty much made-up.
posted by GuyZero at 8:31 PM on August 17, 2011

Looks like Kodak might be up next.

One interesting side effect of the absurdity of the patent wars is that, as patents soar in value, it makes a company with a big patent portfolio and inadequate market valuation an obvious target for liquidation.
posted by mullingitover at 8:34 PM on August 17, 2011 [1 favorite]

Came expecting a takedown of Applesoft (BASIC).

Didn't get one.

Moping off to kick it 8-bit-style by peeking the zero page in hires mode.

(Now channeling the 10-year-old Harvey Kilobit: "TRS-80 Level II BASIC is the GREATEST you Apple puds!" Ah, dead technology juvenile slapfights.)
posted by Harvey Kilobit at 9:07 PM on August 17, 2011 [1 favorite]

Eventually web search is going to stop getting bigger, as local companies move elsewhere

Where, exactly? I'm paying Google $400 a month for advertising and getting 4 times that in return per month. The internet destroys local. That's the point. I know of a lot of lawyers who are shelling out a lot to the yellow pages, which is dying. There's no reason to go local.
posted by Ironmouth at 9:39 PM on August 17, 2011 [1 favorite]



]SUCK ON IT INTEGER BASIC

?SYNTAX ERROR



]

posted by RobotVoodooPower at 9:41 PM on August 17, 2011 [2 favorites]

Ah, I see you're just copying verbatim from Daring Fireball without reading the article.

Your response is actually really hilarious. It's you who didn't bother to read the article, because if you had, you'd recognize what I had quoted which the WSJ editors hadn't taken out after the fact.
posted by Blazecock Pileon at 10:00 PM on August 17, 2011

But, whatever.
posted by Blazecock Pileon at 10:00 PM on August 17, 2011

It looks like a clever analyst at Frost & Sullivan may have figured out why Google bought Motorola and more importantly, why they paid $12.5 billion.

"Motorola has a portfolio of 24,500 patents and patent applications [17,000 + 7,500 pending] that instantly bolsters Google’s strength in the IP war. Looking at some recent patent auctions and using some simple math can show why these patents were indeed the target of Google’s acquisition.

Using one of the industries recent patent auctions as a baseline, in December of 2010, Novell sold off its portfolio of 882 patents for $450 Million. A simple division calculation leads us to a value of $510,204.08 per patent. Why not round that figure off you ask? Well, let’s look at the patent value of the Motorola acquisition.

Forgetting that Motorola also makes mobile phones, let’s say the entire value of the acquisition was in their 24,500 patents and applications. At a $12.5 billion price tag, that equates to…drum roll please…$510,204.08 per patent. Can anyone guess what heuristic they used in the board room in valuing the deal?

In the Motorola acquisition, Google bought a patent portfolio and got a mobile phone business thrown in for free."

It looks like they used some version of mark to market to determine the price and don't care about the rest of Motorola's assets. This suggests that they'll sell them off, spin the off or shut them down and keep the real treasure in their eyes, the patents.
posted by euphorb at 10:12 PM on August 17, 2011 [4 favorites]

Where, exactly? I'm paying Google $400 a month for advertising and getting 4 times that in return per month. The internet destroys local. That's the point. I know of a lot of lawyers who are shelling out a lot to the yellow pages, which is dying

Google is great, but there are other search venues as people move towards apps. Look at something like ZocDoc. This is a physician search (local as dollars). They have integrated inthe physician scheduling to make it really easy to get an appointment scheduled and compare doctors. These are cutting into keyword search by adding some value beyond the ad. I suspect you will find just as you did with the yellowpages that apps emerge to get you to move some of your dollars away from google. Heck since you are in unemployment law have you considered buying Facebook and linked in ads targeting specific profiles of your customers.
posted by humanfont at 1:40 AM on August 18, 2011

Looks like Kodak might be up next.

IIRC, Kodak actually owns some patents that apply to functionality provided by the Java API, and successfully sued Sun over it.
posted by Jpfed at 4:01 AM on August 18, 2011

euphorb: interesting maths quoted there.

Novell: $450,000,000 / 882 patents = $510,204.08 per patent
Motorola: $12,500,000,000 / 24,500 patents = $510,204.08 per patent

Similar to the the comparison with Nortel that mullingitover quoted earlier:

Nortell: 4,500,000,000 / 6000 patents = $750,000 per patent
Motorola: $12,500,000,000 / 17,000* patents = $735,294 per patent

*=this counts the patents in the bag. rather than ones pending

That Novell/Motorola price comparison is too close to be a fluke surely? Now, does this mean that Google worked their bid out on the back of an envelope in a hurry, or is this another mathematical joke from them (as in the mathematical constant bids). I wonder if this is google saying: 'this is a ridiculous stockpiling game, and everyone knows it'.
posted by memebake at 5:17 AM on August 18, 2011

Or that's just what the patents are worth to them.
posted by Holy Zarquon's Singing Fish at 5:50 AM on August 18, 2011

Its a bit specific though.
posted by memebake at 5:58 AM on August 18, 2011

I wonder if this is google saying: 'this is a ridiculous stockpiling game, and everyone knows it'.

There are cheaper ways to make a joke.
posted by Skeptic at 6:19 AM on August 18, 2011

Well, I'm assuming that they did actually want the patents, but bidding $510,204.08 per patent instead of, say, $500,000.00 makes a negligible difference to them (given that they have more cash than they know what to do with) and lets them all have a good giggle at applesoft's expense.
posted by memebake at 6:24 AM on August 18, 2011 [1 favorite]

There are cheaper ways to make a joke.

$3.14159 billion was the perfect punchline.
posted by Theta States at 7:43 AM on August 18, 2011 [3 favorites]

Back when Palm was for sale, some people suggested that HTC should consider buying them. I wonder if HTC will look back on that as something they should have explored.
posted by oddman at 8:43 AM on August 18, 2011

HTC is printing money right now. Even with licensing money to Microsoft. They could always go to HP and make phones for them. Furthermore if Google wants to save a lot of money, they might shutdown all of Moto's manufacturing operations and move their assembly to HTC, just as they did with Nexus One.
posted by humanfont at 9:52 AM on August 18, 2011

mullingitover: When you account for inflation at 3%, Apple is wasting something like, oh, I dunno, more money than all of us will ever earn in our lives every year by sitting on it.

Snarky and cute, but do you really believe both (1) that Apple's cash isn't earning money, and (2) that the inflation rate is a constant value, or that it currently averages 3%?
posted by IAmBroom at 11:12 AM on August 18, 2011 [2 favorites]

Regardless of what the exact inflation rate is, yes, the LITERAL definition of cash on corporate balance sheets is cash which is not invested and thus not earning interest.

Short-term investments earn rough the current US T-bull rate. Long-term investments are a bunch of stuff that has a maturity if grater than one year, but that's everything from 2-year T-bills to VC funds to standard market equities (e.g. stocks).

Yes, I am going to continue to abuse the word literal.
posted by GuyZero at 11:21 AM on August 18, 2011

Also, I cannot type.
posted by GuyZero at 11:21 AM on August 18, 2011

Google is great, but there are other search venues as people move towards apps. Look at something like ZocDoc. This is a physician search (local as dollars). They have integrated inthe physician scheduling to make it really easy to get an appointment scheduled and compare doctors. These are cutting into keyword search by adding some value beyond the ad. I suspect you will find just as you did with the yellowpages that apps emerge to get you to move some of your dollars away from google. Heck since you are in unemployment law have you considered buying Facebook and linked in ads targeting specific profiles of your customers.

I'm doing "employment law" not "unemployment law." The difference being that my customers pay me up front. Facebook is not a good service for the type of work I do. I want people who are searching for a lawyer who does an extremely specialized type of law. Nobody is typing on their facebook page "I need a Merit Systems Protection Board lawyer."

I do know how to advertise my business. As for ZocDoc, I'll believe it when I see it. I don't want people to just make appointments with me. We have to speak briefly. I do not do free consultations.
posted by Ironmouth at 1:13 PM on August 18, 2011 [1 favorite]

$3.14159 billion was the perfect punchline.

I'm surprised Google shareholders tolerate those kinds of silly games being played with their money.
posted by Blazecock Pileon at 5:07 PM on August 18, 2011

Blazecock Pileon: "$3.14159 billion was the perfect punchline.

I'm surprised Google shareholders tolerate those kinds of silly games being played with their money."

To be fair, GOOG shareholders probably are running a 20 IQ point deficit with the average Google engineer.
posted by mullingitover at 5:27 PM on August 18, 2011 [2 favorites]

Its not the definition that investors and analysts follow. Avoiding the standard use on Wall Street seems counter-productive.

I am completely willing to be wrong, so what is your estimate of the average rate of return for cash & short-term investments?
posted by GuyZero at 5:49 PM on August 18, 2011

There is an issue of goog's governance that concerns me. Their ownership structure is such that the voting power of the insiders is much higher than the typical investor. The problem is that these insiders have already gotten such fabulous returns and been able to cash out billions. So what is their actual risk. Sergy, Larry, etc could screw up the entire business and there would be absolutely minimal economic consequences for them. Google could collapse and they would still be billionaires many times over. I just don't think that promotes healthy decision making. The investors who actually are betting on the company growing and have something at stake don't get to really set the board or move company policy.
posted by humanfont at 6:42 PM on August 18, 2011

To be fair, GOOG shareholders probably are running a 20 IQ point deficit with the average Google engineer.

No idea. Maybe we should ask the WSJ what the story is at the present moment.
posted by Blazecock Pileon at 6:52 PM on August 18, 2011

humanfont: "There is an issue of goog's governance that concerns me. Their ownership structure is such that the voting power of the insiders is much higher than the typical investor."

Sure, but what are the drawbacks? Seriously.

I'd rather have a smaller number of insiders with a long-term vision running the place than a bunch of antsy investors who are only focused on next quarter's profits. See also: Yahoo!
posted by mullingitover at 7:28 PM on August 18, 2011 [4 favorites]

There is an issue of goog's governance that concerns me. Their ownership structure is such that the voting power of the insiders is much higher than the typical investor.

Unless you're owning more than 15% of a publically traded company, the "typical investor" will not be affecting corporate governance at all. You only get to vote on the BoD and you have zero say in the slating process.
posted by Ironmouth at 10:14 PM on August 18, 2011 [1 favorite]

Blazecock Pileon : I'm surprised Google shareholders tolerate those kinds of silly games being played with their money.

Google's shareholders tend to take pride in the way Google thumbs its nose at the financial world. From their extremely unorthodox IPO, to their BRK.A-esque refusal to split, to games like the present topic even in their acquisitions.

Google as a company has its flaws, no doubt, but "more of the same" does not count as one of them. Whether that means "better" or "worse" than normal, only time will tell; but they certainly won't bore their investors as long as Brin and Page have the helm.
posted by pla at 8:26 PM on August 19, 2011 [1 favorite]

Google's shareholders tend to take pride in the way Google thumbs its nose at the financial world

It sounds like some kind of business plan. We'll see if they can execute on it with the Moto albatross around their necks...
posted by Blazecock Pileon at 4:59 PM on August 21, 2011

To be fair, GOOG shareholders probably are running a 20 IQ point deficit with the average Google engineer.

I read a study that said AAPL shareholders have 20 point higher IQ than GOOG shareholders.
posted by Theta States at 5:42 AM on August 22, 2011

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