Google says Motorola is more than patents

Google says Motorola is more than patents

By Dan Gallagher | MarketWatch
Jun 22, 2012
MOUNTAIN VIEW, Calif (MarketWatch) — Google Inc. defended its $12.5 billion acquisition of Motorola Mobility at its annual shareholders meeting on Thursday, saying its purchase of the wireless phone maker was about more than simply gaining access to its broad portfolio of patents.
Reuters Google chairman Eric Schmidt, shown here in a speech from Nov. 15, 2011, addressed shareholders on Thursday.
The meeting, held at the company’s headquarters in Mountain View, Calif., drew questions from shareholders curious about the company’s past acquisitions as well as areas such as mobile advertising, privacy and online video offerings.

Absent from the meeting was Google (GOOG) co-founder and chief executive Larry Page. Chairman Eric Schmidt ran the meeting, explaining that Page had “lost his voice,” and would also forgo speaking roles at the company’s I/O developers conference next week, and possibly its second-quarter earnings call next month.
Several shareholders brought up the acquisition of Motorola, which Google closed last month after receiving final regulatory approval. The deal was first announced last August, as Google sought to build up its portfolio of wireless patents as its Android mobile operating system came under legal fire from rivals such as Apple Inc. (AAPL) and Microsoft Corp. (MSFT)
“We bought Motorola for the sum of patents, products and people,” Schmidt said at the meeting.
Patrick Pichette, Google’s CFO, added further that shareholders should not expect Google to deeply integrate Motorola into its own operations. The company has pledged to run the unit separately from its main business, partially to offset concern from other handset makers who use the company’s Android platform.
“It’s really important for its own economics to stay on its own battlefield,” Pichette said of Motorola, calling the company “a fantastic set of assets that needs to be reset and re-prioritized in a number of ways.” He said the purchase was made for the long term.
“Think of it as Google taking Motorola private,” he said, adding that the company would break out Motorola’s financial performance in its earnings reports.
Another issue brought up at the meeting regarding the company’s mobile business was “fragmentation” of its Android platform.
Several handset makers, including from Motorola, Samsung, HTC, LG Electronics, build devices based on Android, but frequently make their own tweaks to the software. This means that when Google rolls out a major update to the platform — the most recent one is known as Ice Cream Sandwich — not all Android handsets are able to update to the software at the same time.
“Our model assumes that everyone moves forward as fast as they can,” Schmidt said. “We can’t force them to upgrade, and that’s not our model to do so.”
He added that, “I’m not as worried about this as I was a year ago.”