Google finally Gives Up and Sells Motorola to Lenovo for 3 Billion US Dollars

Industry 9 months ago by

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Google raised quite a few eyebrows when it bought Motorola 2 years back. However it had remained quite committed to the smartphone sector even though Motorola cost Google quite  a lot. Now it seems it has finally given up because it is going to sell Motorola to Lenovo for a sum of 2.91 Billion US Dollars.

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Google Sells Motorola to Lenovo for 3 Billion Dollars – Giving up on Smartphones?

This is what Larry Page had to say in his blog post “… the smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices.”. What i basically means is that unless and until Google is willing to go all in (which it is not) the smart phone industry is not a good choice for Google, which has feet in pretty much everything, from Quantum Computers, to Robotics to Education. Thing is Lenovo already has experience in the Smart Phone sector but they have yet to enter the US Market. This could be the point of entry that the have been waiting for.

Interestingly after the sale of Motorola some select parts of the company will stay with Google. This includes most of the patents while about 2000 will go to Lenovo. The sale consists of $660 million in cash and $750 million in Lenovo shares, with the remaining $1.5 billion paid in the form of a three-year promissory note.

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Another thing to note here is that this deal is one of the worst financial mistakes Google has ever made to date. Motorola Mobility was acquired for around 12 Billion US Dollars in 2012 and now it is being sold for 2.91 Billion US Dollars. Though one could make an argument that most of the patents are remaining with Google, it still does not justify the loss. It is also slightly sad to see the inventor of the cellphone (Motorola ) discarded as a dead weight. Though of course, for Lenovo Motorola is nothing but the perfect opportunity to put its ambitions to reality.

 

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