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The financial performance of handset, tablet and set-top box maker Motorola suggests that it won't add $12bn (including $3bn of cash) in value to Google's business. But how can Google possibly earn its money back from patents?
Google intends to buy Motorola Mobility (MMI) for $12.5bn. Is it a good deal? Following the announcement of Motorola's financial results for the fourth quarter, we can take a view. From the purely financial viewpoint, the simple answer is: no.
Judging by the numbers, owning MMI will be a significant drag on Google's profits - by about 10 percentage points, making its earnings per share around one third smaller. In profitability terms, the merged company won't actually make any more profit than before. It might even make less.