Monday, August 15, 2011

@ $730K per patent, Google buys Motorola.

Whatever the business wisdom behind buying one of the worst mobile handset manufacturers in the world, Google's acquisition of Motorola is great for patents. Assuming, generously, the value of Motorola hardware division is $0, Google paid about $730K per patent in the deal. On the per patent basis, this is 50% more, than in the Nortel auction won by Apple, Microsoft, and others. Now Google will have a free hand at ripping off Apple design and business strategies, hiring Apple's designers, and so on. Add to it Google's cloud capabilities, with Youtube, Docs, gaming, etc., and you get a very strong challenger, both in the consumer and enterprise segments. It might be a bit too early to sell Apple stock short, but the competition in the mobile world has be come a lot less lopsided. Unless, of course, Google suffers from the Not Invented Here syndrome, and tries to create its own brand of smartphones.

From an innovation theory perspective, this event is also significant because it confirms that Open Innovation does not have a working IP model, except costly patent acquisitions. Free software and open technology is great, as long as it does not involve a major commercial success.

tags: innovation, patents, growth, software, business, model, mobile, control, battle, theory

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