Google Selling Motorola Mobility to Lenovo for $2.91 Billion

[numlock]

Not to mention Google's complete disregard for Motorola employees. I suspect Lenovo will move all R&D and manufacturing overseas.

Seems like Apple is doing it's fair share at creating US jobs thru investments, US based suppliers, it's app ecosystem, data centers , etc.

when apple charges you a $100 for a larger capacity iphone its purpose is to make profit for its shareholders but when google sells of a division its supposed to have a more altruistic purpose?

and google does not invest in the USA, USA based suppliers and data centers?

and however the app ecosystem is split geographically how could that have anything to do with apple? angry birds comes from finland, quizup from iceland etc

 

[2bikes]

From other site:

They bought Motorola for $12.5 billion. Motorola had $3 billion cash on hand. So immediately the real cost was $9 billion. Then they sold the set top box nonsense for $2.3 billion. Thats now $6.7 billion Motorola cost them. Then they were able to write off at least $2.4 billion in taxes due to the loses of Motorola. That brings the cost down to $4.3 billion. Then they sold the rest of Motorola for $2.9 billion, which brings the cost for the vast majority of Motorola’s patents and this advanced technology group and whatever other deals they were able to make to a total of $1.4 billion

Does $2.3b tax write off mean,
a) Google didn`t pay $2.3b in taxes? If so their loses are much bigger.
b) Google didn`t pay taxes from $2.3b? You cannot deduct all of $2.3 from the purchase price but some of it.

 

[kelon111]

Thinkpads worked very well for Lenovo.

Yea , Lenovo downgraded the ThinkPad line so more people could afford them.

 

[lazard]

And Google continues to arm foreign countries (Samsung, HTC, Sony, etc.) against American competitors (Apple, HP) while turning over entire companies to Asia (Motorola) in the process.

Yet the Google fanatics still spin circles thinking they're rooting for the "good guys." What a joke.

I used to love Google. Now I loathe them. Wake up people. Your hero is a phony.

Google selling Motorola to Lenovo actually gives Motorola a fighting chance to finally right the ship.

 

[lilo777]

And Google continues to arm foreign countries (Samsung, HTC, Sony, etc.) against American competitors (Apple, HP) while turning over entire companies to Asia (Motorola) in the process.

Yet the Google fanatics still spin circles thinking they're rooting for the "good guys." What a joke.

I used to love Google. Now I loathe them. Wake up people. Your hero is a phony.

While Apple continues to arm foreign companies (Foxconn, Samsung etc.).
Weird.

 

[sixrom]

This is excellent news.

Lenovo is highly skilled in manufacturing being the world's largest PC maker. They'll make Moto phones even more successful.

Google's big win is eliminating other handset makers from accusing them of Android favoritism, and frees them up to further strengthen their new ten year strategic alliance with Samsung.

It's a brilliant move on Google's part, further assuring great strength for Android going forward.

This is win/win for both of these giant corporations.

 

[paul4339]

Slashgear had an article which broke down just how much money Google lost on the Motorola deal, and surprisingly its not that much.

12.4B purchase price
- 2.9B cash acquired from Motorola
- 2.4B Motorola deferred tax asset
-2.35B sale of set-top box division to Arris
- 75M sale of Motorola's China and Brazil operations to Flextronics
-2.91B sale of Motorola to Lenovo
+1.2B Motorola operating losses

Grand Total: 2.29B

So basically Google paid $2.29B for Motorola's best patents and their Advanced Technology and Projects group.

I think there's a mistake. It's $2.4B in deferred tax expenses against future earnings (so, Google could avoid paying taxes on $2.4B of future income). Also, the $1.2B in operating losses counts too, so it's really $3.6 in deferred tax expenses.. I think.

.

 

[Oletros]

Does $2.3b tax write off mean,
a) Google didn`t pay $2.3b in taxes? If so their loses are much bigger.
b) Google didn`t pay taxes from $2.3b? You cannot deduct all of $2.3 from the purchase price but some of it.

No to both points

 

[LagunaSol]

This was probably just a deal with Samsung.

"You dump Tizen and continue your bondage to us and we'll sell Motorola and steer clear of the hardware business. What do you say, good buddy?"

Google: the new Microsoft. (But even worse.)

----------

Google selling Motorola to Lenovo actually gives Motorola a fighting chance to finally right the ship.

Who cares? It's a Chinese company now.

 

[maxwelltech]

Wow. Never saw that one coming. I thought Google liked their Motorola purchase.

 

[Popeye206]

I'm guessing they see that in their own eco system it's a very crowded market and hard to stand out. MotoX seems like a nice phone, but it's a nice phone in a sea of other nice Android phones that are all competing for the same sale.

Anyway… it seems to jumped on that one way too quick.

 

[lazard]

Does $2.3b tax write off mean,
a) Google didn`t pay $2.3b in taxes? If so their loses are much bigger.
b) Google didn`t pay taxes from $2.3b? You cannot deduct all of $2.3 from the purchase price but some of it.

b. Google offset 2.4B of their profit with Motorola's 2.4B deferred tax asset. Basically they didn't need to pay income tax on 2.4B of their revenue.

 

[2bikes]

No to both points

Please explain.

b. Google offset 2.4B of their profit with Motorola's 2.4B deferred tax asset. Basically they didn't need to pay income tax on 2.4B of their revenue.

So subtracting 2.4B directly from purchase price is wrong. No?

 

[krravi]

So if Google retains the patents what are the Chinese paying for?

 

[Oletros]

Please explain.

Deferred Income Taxes
As of October 1, 2011, the Company’s net deferred tax assets, exclusive of valuation allowances, were $2.5 billion, compared to $2.9 billion as of December 31, 2010. As of October 1, 2011, the valuation allowance against the net deferred tax assets was $2.4 billion, as compared to $2.8 billion as of December 31, 2010.
Included in the net deferred tax assets of $2.5 billion as of October 1, 2011 are: (i) approximately $1.0 billion of deferred tax assets related to capitalized R&D costs that may be amortized for tax purposes through 2019; (ii) approximately $800 million of deferred tax assets related to U.S. and foreign tax loss and credit carry forwards; and (iii) approximately $700 million of deferred taxes related to other temporary differences.

http://www.sec.gov/Archives/edgar/data/1495569/000119312511284248/d244717d10q.htm

 

[lazard]

So if Google retains the patents what are the Chinese paying for?

The Motorola name basically

 

[ucfgrad93]

Wow, that is quite surprising!

 

[Kariya]

Shame.

Another US company handed over to Asia. Waste

This is why i don't feel safe buying smartphones from anyone but Apple. You never know when your after-sales support will be thrown to the curb via negated old/empty new promises.

Palm, RIM, Nokia and now Motorola. Probably only a matter of time before HTC and Sony join them too.

 

[2bikes]

Deferred Income Taxes
As of October 1, 2011, the Company’s net deferred tax assets, exclusive of valuation allowances, were $2.5 billion, compared to $2.9 billion as of December 31, 2010. As of October 1, 2011, the valuation allowance against the net deferred tax assets was $2.4 billion, as compared to $2.8 billion as of December 31, 2010.
Included in the net deferred tax assets of $2.5 billion as of October 1, 2011 are: (i) approximately $1.0 billion of deferred tax assets related to capitalized R&D costs that may be amortized for tax purposes through 2019; (ii) approximately $800 million of deferred tax assets related to U.S. and foreign tax loss and credit carry forwards; and (iii) approximately $700 million of deferred taxes related to other temporary differences.

http://www.sec.gov/Archives/edgar/data/1495569/000119312511284248/d244717d10q.htm

This has nothing to with my question. I didn't ask where does 2.4 come from. My question is how you can subtract deferred tax from the purchase price. They are not paying taxes on the deferred tax assets means they will save only what ever their tax rate is x the assets.

 

[supercoolmanchu]

I hope Google goes bust.
Apple should have bought them when they were smaller, made a better adsense/adwords deal for consumers and kept them as a search engine.

Now they're just a fat search engine/data mining company that looks for new products so they can track you even further. I personally don't want Google to have a big profile of me that's connected with my mobile phone. We know they tried to hack Apple in order to do the same with the iPhone... with Androids it's not even hacking, it's a feature!

Google's revenue is almost entirely ad based. They have started seeing a lot of competition from Facebook and Twitter. In fact more of the big advertisers are spending more of their money for high visibility campaigns on social media sites over Google ads and keywords. They are desperately trying to buy a product line idea from somewhere, and basically just sold their mobile phone division to pay for the thermostat company (and likely just because an Apple guy started it).

Poor management, lackluster products, shrinking ad relevancy, baby talk corporate name and a duplo styled robot mascot ... the only thing they have to show for it, is a website (which as an asset is essentially vapor-ware). My prediction for next on the fire sale: the useless eyeglass division.

 

[179202]

Agree.

Google holds too much leverage over Samsung with Google Maps. At some point, Samsung has to follow Apple's lead and find a way to divorce themselves from the Google's maps leverage.

FWIW, as painful as the Apple Maps roll out was, I believe time will prove out that Apple ultimately made the right choice.

I agree, being free of a company not afraid to strong arm them was a good choice for Apple. They got it both ways. Google Maps is on the iPhone without them paying a dime because Google want it on there. Apple get to do their own thing. WIN-WIN.

I'd be VERY surprised if Samsung didn't try something similar, especially with Lenovo now coming onto the scene. They need to differentiate themselves somehow, be it gradually or overnight.

 

[lannister80]

So does this mean all the employees that work in Libertyville IL, who were going to have to work at the Merchandise Mart in in downtown Chicago, will now be transferred somewhere else?

 

[179202]

I thought they had to put Tizen on the back burner because of this new deal with Google.....

I mean Samsung already controls Android market share and the only major competitor is Apple/iOS.

Either Samsung really needs to reign it in and fix (re get rid of) TouchWiz, or we need some new players to step it up. Unfortunately the best (HTC, Moto) can't seem to gain a foothold.

I haven't seen it reported that Tizen is now on the back burner because of that deal. Mind pointing me to where you read that? I'll stop spouting that opinion if that's true. Though, this is Samsung we're talking about!

This deal could cause companies to start pushing towards Microsoft. It's seen gains recently and will only get stronger.

 

[iVoid]

That's what I figured: They just wanted the patents. Didn't care about the hardware side from the beginning.

 

[NewbieCanada]

not really. they are unloading a loss. probably writing off the taxes, and they're keeping the patents. not much of a loss...stock should go up.

Yes you're right, of course. I should have phrased that a bit differently - don't apply personal logic to the stock market. I own some google. I'm happy about this.