Tuesday, August 16, 2011

What if Google Had Bought Motorola in 2010?

When the Nexus One was introduced, Motorola sported a market cap of about $10.6 billion. That's for the entire Motorola beast, including the infrastructure and enterprise operations that later became Motorola Solutions. At the time, mobile devices represented 31 percent of Motorola's sales and did not generate profits.

Thirty-one percent of $10.6 billion is $3.3 billion, and Google is paying 3.8 times that amount to acquire Motorola Mobility.

Google would probably have needed to offer a similar-sized buyout premium, though. This would put the theoretical buyout price at $6.2 billion, or about half of the final price tag. But that was then, and this is now. Google wasn't quite so much aware of the dangers of patent infringement lawsuits back then.

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