Google's Headache: After Patents, What To Do Now With Motorola?

Summary: Google's move to slash and burn 4,000 jobs worldwide is more about the search giant's move to return Motorola Mobility to profitability, months after Google engorged itself on 17,000 patents.
 It's no more about the patents, but the post-honeymoon interval is providing Search engines one besides of a frustration.

There's no question that Samsung Mobility's wide profile of 17,000 patents will take a position Search engines in excellent stead over the continuous lawsuits with Apple organization, but it's obvious that other aspects are now getting concern.

Google's switch to mix up up its devoted smartphone-making device should come as no shock. "[Motorola Mobility] missing money in 14 of the last 16 sectors," says an 8-K processing with the U.S. Investments and Return Commission payment. Search engines also cautioned that traders should anticipate to see "significant income variability" from the organization in the arriving sectors.

In a few words, Samsung isn't switching a benefit, and now Search engines has its certain value chest, it doesn't want to get rid of out in the lengthy run.

Earlier this season, Google professional chair Eric Schmidt informed traders that the Samsung purchase was "...for the sum of patents, items, the people, and the advancement," in a switch to force the media and traders away from considering the purchase was all about the patents.

Google us president Ray Web page had a different take, ZDNet editor-in-chief Ray Dignan had written previously this year:

    "If you consider that Search engines was going to pay nearly $4 billion dollars for Nortel's 6,000 WiFi patents, $12.5 billion dollars for Samsung Flexibility doesn't look like a big slice of modify. With Samsung Mobility's patents, Search engines can battle legal cases. In other terms, Search engines creates out its certain profile."

Yeah, it was about the patents. But now it's not, and Search engines has to ruffle some functions and mix up Samsung Flexibility to be able for it to produce benefit in the future.

Motorola Mobility's first-quarter income revealed a decrease in $86 thousand, more than its $81 thousand decrease in the same one fourth a season ago.

To complicate issues, the 8-K processing says :

    "Google desires to have a severance-related cost of no higher than $275 thousand, which it considers will be mostly identified in the third one fourth, with the staying severance-related expenses identified by the end of 2012."

That's near to four-times the reduction it made in the first one fourth. The search massive alerts that "Although [Google] cannot currently estimate the amount of these other expenses at this time, these extra expenses could be considerable."

In other words: it's going to get more intense for Search engines before it gets better.

Perhaps at first, Samsung Flexibility seemed like a completely legitimate buy for the patents, but now it isn't. The aftershock of purchasing the profit-losing organization is getting its cost on Search engines. There's little point in having a organization that doesn't earn money, so in doing so, Search engines has cleaned the certain aspect off the purchase and is now concentrating on the business itself.

Whether or not the patents were a extra or incredible to buy Samsung, it doesn't issue. What Search engines has remaining is many patents it can flame back at Apple organization et al with, and a smartphone-making device it can update and focus on the common customer industry, and the BYOD business lifestyle with.

The plan is for Search engines to "shift the focus from function mobile phones to more impressive and successful gadgets." Cut away the fat from the lower-end gadgets it delivers out while its initiatives on less, more successful mobile phones -- like... Apple? Band any bells?

Patents first, the relax after. For Search engines, despite Samsung Mobility's issues, it's still a excellent buy for the cost it purchased it at.
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