Following a takeover by Google, Motorola has lost about $2 billion. Since the takeover, the company also significantly reduced its workforce, from 20,000 to 3,800. The search engine giant has now decided to sell Motorola smartphone business to Lenovo for $2.9 billion.
The latest acquisition marks Google?s biggest one yet, but it seems that is marks the search?s engine?s biggest mistake as well. The deal was announced on January 29, 2014 and will relieve Google from the unnecessary financial burden which has been troubling the internet company since buying Motorola Mobility for $12.4 billion in 2012. The search engine had managed to recover certain portion of the money which it spent on Motorola by selling the company?s set-top operations to Arris Group for $2.35 billion in 2013.
The search engine giant is also keeping most of the patents which came with the purchase of Motorola. So far, it is not clear whether Google will have to absorb a charge to account for the difference between what it paid and what it is getting back. The issue might be addressed by the Mountain View, California company on January 30, 2014 when it will announce its fourth-quarter earnings after the market closes.
The majority of investors have noticed that Motorola has become an unnecessary drain on Google?s profits. It is a perspective which is reflected by the Wall Street?s reaction to the sale. While Google is stepping back, Lenovo Group is preparing for a major extension. The world?s biggest maker of personal computers is now determined to become a bigger player in the smartphone segment.
Photo Credits: Bloomberg
