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Google is selling Motorola Mobility to Lenovo

Posting in Finance
Google announced today it will sell its Motorola Mobility smartphone unit to Lenovo for $2.91 billion. Yep, $2.91 billion— about one quarter of the $12.5 billion Google paid for the mobile company less than two years ago. 

Google's acquisition of Motorola Mobility, the search engine's biggest takeover to date, was meant to boost its patent portfolio and position it to better compete with rival Apple. But Motorola has continued to struggle, posting operating losses even after Google trimmed staff, reduced costs and streamlined the smartphone company's focus on expanding its share of the mobile device market. 

The sale is a defeat for Google. However, the company isn't a total loser. Google said in its announcement it will maintain ownership of the majority of Motorola Mobility's patent portfolio, including current applications and invention disclosures. Lenovo will receive a license to the portfolio of patents and other intellectual property. Lenovo will also receive more than 2,000 patent assets as well as the Motorola Mobility brand and trademark portfolio. 

Google CEO Larry Page has tried to put a realist we-got-what-we-really-wanted spin on the sale. In a blog post, Page wrote Google acquired Motorola to "supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users." 

He went on to explain how Google has largely achieved those goals; and that now was the time for a company better suited to compete in the smartphone market to takeover. 

Page also emphasized that the sale does not signal a shift away from its other hardware efforts.

A snippet of Page's post:

Over the past 19 months, Dennis Woodside and the Motorola team have done a tremendous job reinventing the company. They’ve focused on building a smaller number of great (and great value) smartphones that consumers love. Both the Moto G and the Moto X are doing really well, and I’m very excited about the smartphone lineup for 2014. And on the intellectual property side, Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners.
But the smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices. It’s why we believe that Motorola will be better served by Lenovo—which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.

— By on January 29, 2014, 3:16 PM PST

Kirsten Korosec

Contributing Editor

Kirsten Korosec has written for Technology Review, Marketing News, The Hill, BNET and Bloomberg News. She holds a degree from Northwestern University's Medill School of Journalism. She is based in Tucson, Arizona. Follow her on Twitter. Disclosure