google sells Motorola

Google agreed to sell it entire Motorola business for $3 billion to Chinese computer company, Lenovo, on Wednesday.  The deal between both companies gets Google out of the manufacturing business and hopefully gets Lenovo into the market, according to CNET.

After the deal was announced, Google’s shares went up 2.6 percent to $1,136. Motorola lost more than $1 billion in 2013 as its revenue was sluggish even with the release of the MOTO X. Lenovo is shelling out about $2.9 billion for Motorola, $660 million in cash, $750 million worth of Lenovo stock and about $1.5 billion in a three-year agreement to Google.

Google is taking a huge loss since they purchased Motorola for $12.5 billion in 2011 which was the company’s largest acquisition. To keep the deal profitable, Google is keeping all of Motorola’s patents and giving Lenovo a license for the use of patents on future devices.

When Google announced they wanted to develop their own smartphone with Motorola, it caused a a rift between Google and other Android smartphone markers like Samsung and HTC  whose primary products come from Android smartphones. Selling Motorola may settle any beefs the two companies may had have with Google.  Google smartphone business will still continue as they will sell their Nexus smartphones and tablets, but those are manufactured by other companies, most recently LG and Asus.

January 30, 2014  
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