A Brief Google-Motorola Reader

Unless you've been sleeping under a rock, you know Google recently agreed to buy Motorola for $12.5 billion (a price that apparenlty translates to a 63% premium).  You can read an overview of the deal here.

Steven Davidoff examines the large breakup fee here.  He notes that the large fee actually signals both investors and regulators that Google is very confident of antitrust approval--and will likely fight hard to ensure it gets it.

While Motorola likely appreciated the breakup fee, it's probably not as thrilled with the restrictions it now faces in conducting its business till the deal is done.  Davidoff also comments on that here.

The deal is ultimately about patents, and Bloomberg argues it serves to illuminate how much our current patent system is in need of reform.  Write the editors: The current system "rewards lawyers and investment bankers far more than inventors or consumers."

Finally, some are noting that the deal could ultimately prove to be a disaster for Google, noting the conflicts it creates between Google and a number of its partners, as well as the fact that "hardware manufacturing is a crappy, low-margin commodity business."  Google shares appear to be down over 10% since the announcement of the deal, compared to a roughly 6% decline for the S&P 500.

SJP