Google just wrapped up its conference call explaining its decision to buy Motorola Mobility.
The big theme of the call: Google is paying $12.5 billion to protect the Android ecosystem from the patent warfare of Microsoft and Apple.
Google is not going to be giving Motorola favourable treatment, says Android chief Andy Rubin. It will be a separate division and it will have to fight for Google’s business like everyone else.
It’s a smart way to sell the deal early on: The government might buy it, and Android partners might buy it, too.
But, who’s kidding who? It would be insane for Google not to do all it can with Motorola.
Google has a new toy, and you know it’s going to exploit it to its full potential.
Here’s our live notes from the call:
Hi there! We’re live blogging the conference call on Google’s $12.5 billion buy of Motorola.
The call is supposed to start at 8:30 AM eastern.
Refresh your browser for the latest, or click here.
8:31: We’re still waiting for the call to start, in the meanwhile, there’s a lot to think about here …
It’s the first big move in the Larry Page era, did Google just infuriate Samsung, who was making Google Nexus phones, does this mean mobile ads don’t work — oops! Must stop now, the call is starting …
8:33: Jane Penner, head of Google IR on the call, introducing speakers///
8:35: Larry Page on the call, tremendous shareholder value. In May 2005, met Andy Rubin, who had a crazy vision for mobile industry. Thought inefficient for hardware makers to make software. That was just 6 years ago and now Android a leading platform. Android has grown tremendously. More than 150 mill Android devices activated worldwide, 550,000 Android devices lit up every day.
8:36: As for Moto, innovation has led to industry milestones, including first mobile phone, the starTac. After launch of Android, new CEO got together with Andy. Sanjay made a big bet he bet on Android, and that has seen him transform Motorola. Motorola has a great team w. experience in mobile computing. Exciting product roadmap. Oppty to accelerate in the home business. Strong patent portfolio.
8:38: Look forward to working with all of our partners. Android is open and it will stay that way. Plan is that Moto will remain a licensee. Spoken to some of our partners, they share our enthusiasm. Will let Sanjay and his team to drive the business.
8:41: Sanjay Jha, MMI’s CEO is talking on and on about Motorola’s business … generally bland non-talk about the company.
8:41: Pat Pichette, Google CFO: Google will acquire for $40 per share in cash, a 60% premium over Friday’s close. Unanimously approved by boards of both companies. Mildly accretive, we will run Moto as a sep business, will include segment. Not an effect on our core business.
We keep plenty of financial flexibility for future opptys. Over 120 acquisitions over the last few years. Turn over to questions …
8:43: Broad legal ramifications before and after deal closes? Legal strategy? Call was cut off …
8:44: Next question, over 15,000 patents with 7,500 pending?
TECHNICAL ISSUES … Call is not working. Calls are dropping … Awkward and odd …
David Drummond, Google’s legal chief: Android under threat from some companies, while I’m not prepped to talk strategies, combining with Motorola and having that portfolio to protect the ecosystem is a good thing.
Sanjay Jha: Over 17,000 issued, over 7,500 applications out there. Much better support to the businesses.
8:47: Android partners, a risk to them?
Andy Rubin: I spoke yesterday to top 5 licensees, all showed enthusiastic support. Android was born as an open system, doesn’t make sense to be a single OEM.
8:48: What convinced you this was optimal solution? Competencies that aren’t core to Google?
Larry Page: I’m excited about this deal, while competencies that aren’t core to us, we plan to operate as a separate business, excited about protecting the Android ecosystem. We really believe Moto has optty for growth, we believe in them and its vision for the future.
8:50: Patrick: Once deal closes, accretive on non-GAAP basis.
David: I think aggressive demands in the Android ecosystem.
8:51: How does this change from a partner perspective? Does this help Microsoft?
Larry Page: We expect no change, no change in how we’re running Android. Partners excited about this.
Andy: Moto one of the early licensees, I see as protection to the ecosystem and extending it also.
8:53: David: We strongly believe this will be approved. We think it’s strongly competitive. We are protecting the Android ecosystem, which is pro-competitive. We certainly think this is a competitive transaction. In terms of the agreement, we’ll be filing agreement it will be in the public filings which will be forthcoming.
8:54: Legal ramifications? How does that change w. the lawsuits filed? How did you put a price on the value? Why no stock?
David: Before acquisition closes, lawsuits managed by Moto. Don’t think there is anything more to add. We’re not going to talk about the legal strategy. In a good position to protect ecosystem.
Patrick: We really believe we have a fair and full price for this transaction. In that context that we have the valuation.
8:56: How do you manage the business models related to partners? How is Android at an equal playing field?
Larry Page: Tremendous Android success because we’ve been open. We have Nexus and we have a lead device strategy. We select each around Xmas a manufacturer. That includes semiconductors and other components and teams join together in one building and by Holiday a device pops out, and that will not change. Moto will be a sep business, they will have to bid and compete.
9:00: Will you look at more patent buys?
David: We need to build patent portfolio. We will continue to do that.
9:01: Turn it to Larry page for last thoughts …
Larry: We are excited about this whole business and working with Motorola team. We at Google excited about this. MMI folks are as well. Android growing like crazy. Benefit all, including Motorola. Excited about those opttys. MMI made a great bet and that made them a leading Android maker. The leading home devices maker, big optty. With that, thank everyone for joining us.