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New information gleaned from filings with the U.S. Securities and Exchange Commission show that Google outbid itself by a total of about $3 billion in order to acquire Motorola Mobility.
Bloomberg reports that Google first bid $30 a share for Motorola, then increased its bid to $37 per share when Motorola and its advisers asked for more. Then, with no other companies bidding on Motorola, Google increased its bid again to $40 per share, Bloomberg reports. The move seems to show how important the sale was to Google, and suggests a level of desperation in the company’s moves to acquire Motorola’s trove of more than 17,000 mobile patents.
Google has since made it clear that its acquiring of Motorola was primarily about patents. Right now, the smartphone sphere is awash in patent lawsuits. Apple is taking on Samsung all over the world (with Samsung suing back), and the iPad maker successfully got its rival’s Galaxy Tab 10.1 banned from sale in Germany for patent infringement. Apple is also duking it out with HTC over similar smartphone patent issues with its iPhone. Google is attempting to come to HTC’s aid in that case. There are numerous other examples – Google’s fight with Oracle, Apple’s battle with Lodsys, and Motorola’s suits with Apple – but at the heart of all of them are patents.
After Microsoft and Apple joined together with other tech companies to acquire a huge load of patents from Nortel, Google decided it, too, needed the armor of more patents to help it win out in court. The SEC filings show that from the very beginning, the talks between Google and Motorola were about patents. It was later that Google decided to make a bid for the entire company, and Motorola, itself worried about fending off patent lawsuits, decided it would be better off under the larger umbrella of Google in dealing with those battles. That led to the $12.5 million deal between the two companies.
In the end, both Google and Motorola are taking a bit of a gamble, but the deal and the talks surrounding it highlight just how volatile the patent law landscape really is in the mobile sphere. Tech companies are actively trying to out-compete each other in stores, as well as sabotage one another in court. It remains to be seen whether the deal between Google and Motorola will actually help either company fight those legal battles, but it’s clear that both companies are hoping for some serious help from the other.