Google Says Patents, Tech Were Less than Half Motorola's Price
07/24/2012| 06:36pm US/Eastern
By John Letzing
Google Inc. (>> Google Inc) put a finer point on the value it placed on Motorola Mobility's intellectual property when it agreed to buy the mobile-phone maker, saying in a regulatory filing Tuesday that $5.5 billion of the $12.4 billion price tag was attributable to "patents and developed technology."
Google surprised many in the technology world with its announcement last year that it intended to buy Motorola. The Mountain View, Calif. Internet search giant argued the deal would strengthen its patent portfolio and help legally insulate its Android mobile phone software from infringement lawsuits.
The acquisition would "supercharge Android," Chief Executive Larry Page wrote then.
Google closed its acquisition of Motorola in May, following extensive antitrust reviews.
Last week, Google reported second-quarter earnings that included Motorola results from a portion of the period. Google said Motorola contributed some $1.25 billion in revenue, though the new unit also posted a $233 million operating loss.
During an earnings conference call with analysts, Google executives declined to go into much detail about their strategic plans for Motorola, which is a longtime Google partner that has built devices based on Android.
"Clearly, everybody should expect some changes at Motorola," Chief Financial Officer Patrick Pichette said during the call, "but we have nothing really to announce right now."
Google has sought to bulk up on patents as a protective measure, as a number of its technology rivals have targeted both the company and its Android software with litigation.
Oracle Corp. (>> Oracle Corporation) sued Google for alleged patent and copyright infringement by Android in 2010, though a related trial earlier this year resulted in a victory for Google.
Apart from patents and developed technology, Google said in the filing Tuesday that $2.9 billion of the purchase price for Motorola was attributable to cash acquired, $2.6 billion was related to goodwill, $730 million for customer relationships and $670 million for "other net assets acquired."
The goodwill, Google explained, is "primarily attributed to the synergies expected to arise after the acquisition."
Write to John Letzing at firstname.lastname@example.org
Subscribe to WSJ: http://online.wsj.com?mod=djnwires