Recruiting Blog

Real Reason Google Bought Motorola: R&D

Strategic Search Corporation are specialists in technical recruiting and engineering recruiting.In my article at http://www.recruitingblogs.com/profiles/blogs/where-will-the-motorola-engineers-go I shared that Google was dumping the Chicagoland landmark of Motorola for only $2.9 Billion to Lenovo!
Furthermore, a similar article at http://www.forbes.com/sites/gordonkelly/2014/02/10/how-google-used-motorola-to-smack-down-samsung-twice/ referenced the same information. This whole sega left a bad taste in Chicagoland area inhabitant’s mouths especially since Motorola was both: a) a Chicagoland area legendary company and b) it will loose a lot of R&D, scientific, engineering, IT and technical jobs for the Chicagoland area in specific and the United States in general.
Over the years many technical recruiters, engineering recruiters, scientific recruiters, IT recruiters and R&D recruiters made their fortunes from uncovering key talent for the executive recruitment team at Motorola. Furthermore, Lenovo’s history (e.g. when they acquired IBM’s PC business), is design engineering and manufacturing in Asia including a bulk of the jobs there!
However, a closer look at the math behind the Google/Lenovo deal shows that instead of Google’s supposed $10 billion loss on the purchase of Motorola Mobility, they actually wound up paying only $1.5 billion for what it retained $5.5 billion worth of Motorola patents and their research labs. Here is why:

Google bought Motorola Mobility for $12.5B, but here is what Google gained in the process:

1. $3.2B – Motorola had in cash

2. $2.4B – Saved in deferred tax assets

3. $2.5B – Selling off the cable and set top box business in 2013

4. $2.9B – Sale of the handset hardware business to Lenovo

= $11B total gain from the acquisition 22 months ago (and before selling to Lenovo)! Therefore, instead of a supposed $10 billion loss on the purchase of Motorola Mobility, they actually wound up paying only $1.5 billion for what it retained $5.5 billion worth of Motorola patents and their research labs!

What are your thoughts?


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