Another excellent move by Google: Offload Motorola Mobile Devices to Lenovo, while keeping the patents to themselves.
Skimming through the news this morning, I found there is apparently a lot of confusion about the planned sale of Motorola by Google. From decrying a huge loss by Google by such infotainment sites like Wired and Slate, to seeing Google giving up on copying vertical integration of Apple (hardware + software + services), like Stratechery by Ben Thomson.
Let’s look at things from a broader perspective. The acquisition of Motorola was necessary to protect Android, after Apple, Microsoft and BlackBerry outbid Google for Nortel patents. The Apple-Microsoft-BlackBerry trio made it very clear that they intend to put a drag on then-fledging Android ecosystem and extort royalties from Android OEMs. The cost of doing nothing was huge for Google – just think how much more nasty the patent wars may have turned out for Android if the acquisition hadn’t taken place. Any “profit and loss” analysis of the Motorola deal must account for the opportunity cost associated with Motorola patents. Android is, was and will be critically important for Google’s core online ad business, as I will explain in a bit.