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Corporations like Alphabet don't spend 1% of their revenue on something unless they're very confident it will pan out.

brudgers 8y ago
Alphabet spent $12.5 billion on Motorola Mobility in 2011 and sold it to Lenovo for $3 billion three years later. The lost $9+ billion? Nobody really noticed. For Alphabet, $1 billion is mad money, not the rent. Self driving cars are a moonshot.
- ipsum2 8y ago
  The 9 billion was spent on patents. See: https://en.wikipedia.org/wiki/Motorola#Motorola_Mobility_deal_by_Google https://en.wikipedia.org/wiki/Motorola#Motorola_Mobility_dea... Specifically, this section: "According to the filing, Google and Motorola began discussions about Motorola's patent portfolio in early July, as well as the "intellectual property litigation and the potential impact of such litigation on the Android ecosystem". Although the two companies discussed the possibility of an acquisition after the initial contact by Mr. Rubin, it was only after Motorola pushed back on the idea of patent sale that the acquisition talks picked up steam. The turning point came during a meeting on July 6. At the meeting, Motorola CEO Sanjay Jha discussed the protection of the Android ecosystem with Google senior vice president Nikesh Arora, and during that talk Jha told Arora that "it could be problematic for Motorola Mobility to continue to exist as a stand-alone entity if it sold a large portion of its patent portfolio". In connection with these discussions, the two companies signed a confidentiality and non-disclosure agreement that allowed Google to do due diligence on the company's patent portfolio."
- jacksmith21006 8y ago
  You are missing a lot of details. Google purchased and then sold the cable hardware business for $2.4B to Arris. Then there is the $6.6B tax credit and the selling the factories and also they kept the AP group. https://www.forbes.com/sites/timworstall/2013/04/29/why-google-did-buy-motorola/#4417a4ac558f https://www.forbes.com/sites/timworstall/2013/04/29/why-goog... But the key was it allowed Google to do cross license deals that avoided paying a competitor patent license fees which is double bad. Paying money and giving your competitor money. Moto was a brilliant deal by Google.
ummonk 8y ago
You mean like Nest and Google Fiber?
notahacker 8y ago
On the other hand, irrespective of how confident they are that things will pan out, corporations like Alphabet and Fiat Chrysler have no problem whatsoever with issuing press releases saying that Fiat Chrysler is willing to sell up to 62k Pacificas to Alphabet within the next few years under an agreed framework if Alphabet decides it's made enough progress to actually spend 1% of its annual revenue on more cars.

Alphabet spent $12.5 billion on Motorola Mobility in 2011 and sold it to Lenovo for $3 billion three years later. The lost $9+ billion? Nobody really noticed. For Alphabet, $1 billion is mad money, not the rent. Self driving cars are a moonshot.

ipsum2 8y ago
The 9 billion was spent on patents. See: https://en.wikipedia.org/wiki/Motorola#Motorola_Mobility_deal_by_Google https://en.wikipedia.org/wiki/Motorola#Motorola_Mobility_dea... Specifically, this section: "According to the filing, Google and Motorola began discussions about Motorola's patent portfolio in early July, as well as the "intellectual property litigation and the potential impact of such litigation on the Android ecosystem". Although the two companies discussed the possibility of an acquisition after the initial contact by Mr. Rubin, it was only after Motorola pushed back on the idea of patent sale that the acquisition talks picked up steam. The turning point came during a meeting on July 6. At the meeting, Motorola CEO Sanjay Jha discussed the protection of the Android ecosystem with Google senior vice president Nikesh Arora, and during that talk Jha told Arora that "it could be problematic for Motorola Mobility to continue to exist as a stand-alone entity if it sold a large portion of its patent portfolio". In connection with these discussions, the two companies signed a confidentiality and non-disclosure agreement that allowed Google to do due diligence on the company's patent portfolio."
jacksmith21006 8y ago
You are missing a lot of details. Google purchased and then sold the cable hardware business for $2.4B to Arris. Then there is the $6.6B tax credit and the selling the factories and also they kept the AP group. https://www.forbes.com/sites/timworstall/2013/04/29/why-google-did-buy-motorola/#4417a4ac558f https://www.forbes.com/sites/timworstall/2013/04/29/why-goog... But the key was it allowed Google to do cross license deals that avoided paying a competitor patent license fees which is double bad. Paying money and giving your competitor money. Moto was a brilliant deal by Google.

ummonk 8y ago

You mean like Nest and Google Fiber?

notahacker 8y ago

On the other hand, irrespective of how confident they are that things will pan out, corporations like Alphabet and Fiat Chrysler have no problem whatsoever with issuing press releases saying that Fiat Chrysler is willing to sell up to 62k Pacificas to Alphabet within the next few years under an agreed framework if Alphabet decides it's made enough progress to actually spend 1% of its annual revenue on more cars.