Google + Motorola = iPad Killer

The world is still all a-flutter over the Google/Motorola deal.  Reuters wrote a piece the other day (yesterday, which was also the start of the new school year for my kids so time has been tight as I get them geared up), and I’d like to throw my hat into the discussion ring on it.  Let’s start with a quote:

Google’s move was widely seen as a response to its loss in the auction of 6,000 Nortel patents to a group led by Microsoft Corp, Apple Inc and Research in Motion, which fetched an unprecedented $4.5 billion in July.

At the risk of beating the poor horse completely into the ground, I still don’t think Google wanted those patents.  THEY WOULD HAVE THEM IF THEY DID.  Money was not an option.  No, I think that Google wanted to run up the price on the patents to jump-start the “Patent Arms Race”, and watch while everyone else bought into it but them.   I think they had plans to buy Motorola all along, and that they have plans to build an actual product.  Further, I think that product will be the tablet that beats the iPad.

I’ll pause while that sinks in.

Part of me thinks that because of another article I read about who can beat Apple at the tablet game.  They didn’t mention Google, so I’m doing it for them.  (I’m nice that way.) If anyone can beat Apple at anything, it’s Google. I said it and I’m glad.

Back to the original article, I don’t think the race is likely to be over so quickly, and certainly not because of Google’s purchase, be it for patents or product development.  (Yes, I do like commas, why do you ask?) I still think the Nortel Patent price was artificially inflated by Google, but I don’t think the prices will come back down automatically.  The war is not only not over, it’s just begun, IMHO*.

Because of the Patent Troll problem and because of the flaws in the patent system, you have to build your stable of patents and everyone who can, will.  Maybe things will go back to normal?  Time, and the InterDigital sale and Eastman Kodak auction.  But either way, I think Google snookered everyone.  They got a decent base of patents, that they can call upon for defensive purposes if needed, for a fraction of the Nortel prices.  And, they have hardware capability now too.  Giddyup.

Just sayin’,

IPTT

*In My Humble Opinion

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Nortel buyers, are you angry yet?

So today should be fun!   The whole world (ok, the small slice of it that follows patents) will be weighing in on Google’s recently announced purchase.  Not liking to be left out even though I have a lot of work to do, I feel compelled to add in my 50 cents.  In no particular order, save that the list is actually ordered because I like numbers rather than bullets, are my comments:

1.  What did I tell you?  If Google had wanted the Nortel patents they’d have won the auction.  They had the money, and they had this up their sleeve the whole time.

2.  Then, Google puts out the whiney-baby, “feel sorry for us” article wherein I likened them to a dude that tried to play my friend (note to playah: knock it off, or she’ll knock it off for you).  Well played, Big G.  Throw everyone off the “we’re about to buy Motorola” scent.

3.  How mad is the consortium that bought Nortel’s patents right about now?  Big G ran up the bidding and forced you all to (over)pay a ton of money.  That sent reverberations throughout the industry and forever changed the valuation of every company on the planet with a portfolio.  InterDigital, anyone?  Man, those guys had to be ecstatic!  Here’s a hint, Southern style:  when they bid pi?  You done been had.

4.  Quote from the Wired.com article:

“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” Page wrote.

Again, nicely played.  So, instead of spending $4.5B on a patent portfolio alone, they are now a hardware manufacturer as well.  See how that works?  INTELLECTUAL VENTURES, I’m looking at you.

I like consistency and this purchase meets that criteria.  While recognizing that patents are required to operate in the smartphone space, broken system or not, Google chose to buy a hardware company.  Any patents Motorola has now transfer to Google so they have gotten into the manufacturing business and now hold patents that they can use to defend themselves, all in one foul swoop.  They are behaving in a way that is consistent with the message they have been putting out.  I like that.

Larry Page, for the win.

Just sayin’,

IPTT

Kettle to pot: you mean we’re BOTH black?

Anyone who’s anyone has read this by now.  There are a lot of choice nuggets to pull out and frankly, I’m at a loss with where to start.  Here, in no particular order, are my thoughts:

1.  Regarding the quote that

“…Google has very few of its own patents; with Nortel’s portfolio, it could change the balance of power in the smart-phone industry.”

Google has so much more going for it than just the smart phone industry.  Google+ will out-Facebook Facebook inside of three years, no question.  This is a very clear case of something else at work in Google’s mind, in that if Google had really wanted those patents, they’d have them.  The fact that they don’t tells you the “balance of power in the smart-phone industry” is not under the first tab of their playbook.   Great Nate said it himself: “Had [Google] simply waited for the auction, it easily could have won.”  That it didn’t and they didn’t tells you they didn’t want to.

2.  With the stalking horse bid, they forced their competitors to a) pay a &@#$-ton of money, by b) getting in bed with one another.  Google, FTW.

3.  Wait, IV was going to monetize the patents and not bring a product to market?  Is that what you meant by this, Nate?

Investment companies like mine, which had been interested in Nortel’s portfolio for its potential financial return,

Let’s refer to the glossary for a definition of Patent Troll/NPE, shall we?  Or wait, perhaps IV was going to launch its own line of smart phones using Nortel’s patents and that’s what he meant by “potential financial return”.  Hey, they could have called it the “IV-IVg”!  (Hint: use your knowledge of Roman Numerals).  Maybe that’s what he meant?

4.  This is the most disingenuous quote in the whole piece:

More importantly, this sale validates the notion that patents will be a fundamental tool in the tech industry. They had been moving toward that position for years, but the magnitude of Nortel’s sale shows that they have arrived. Patents virtually define the pharmaceutical and biotech markets, and in the future they could play the same role for tech.

Mr. Myhrvold, do you honestly expect anyone to believe that you believe that the Nortel patent sale validates patents as a fundamental tool in the tech industry?  Just now that validation happened, with this huge sale?  Really?  REALLY?  Your company has been acquiring patents on a massive scale since 2000 and finally, as we all knew would happen, sued for infringement.  You’re not fooling anyone…see post title.

Just sayin’,

IPTT

But then who will create Angrier Birds?

Here’s food for thought:  what good are those Nortel patents, the ones that apply to smart phones anyway, if there’s no one around to develop apps for them?

From the article:

Software patent owners in the US have latched onto potential revenue streams to be earned from independent developers by suing over perceived infringements of their intellectual property – which can be expensive for developers to defend even if they are successful.

Wait…”software patent owners”?  That’s a generous description of patent troll, but OK.  We’ll roll with it.  Many moons ago when I was a developer, I can say with certainty that defending myself against a patent suit would have been impossible.  If the Apples and Googles of the world will not defend the people who make apps for their respective platforms, then who can blame the guy working 80 hours a week on the cheap to come up with the next Angry Birds from, you know, not working 80 hours a week on the cheap to come up with the next Angry Birds?

Right now, it’s not clear from the law if Apple or Google actually can defend their developers, so there’s also that angle.  It would be in their best interest not to bite the hands that feed them, but they may be on a short enough leash that they can’t help it.

Not every developer out there can afford to pull a @simonmaddox and take his marbles and go home, tempting though it may be.   But you can certainly see the draw of wanting to, in the face of the Lodsyses of the world (or whatever the plural of that name happens to be).

Just sayin’,

IPTT