Joff Wild

Here is an excerpt from an interview that the New York Times conducted with Google’s director of business development for Android John Lagerling last week about the launch of the Nexus 4 phone and Nexus 7 and Nexus 10 tablets:

Q. So how does Google take advantage of the Motorola acquisition?

A. The way I understand it is, it’s mostly about the patents, the way you can sort of disarm this huge attack against Android. We talked about prices. There are players in the industry who were unhappy about more competitive pricing for the consumers. They want to keep the prices high, they want to force the price to be so high that operators have to subsidize the devices very highly. That’s not only the Cupertino guys but also for the guys up in Seattle. They want higher margins, they want to charge more for software.

We simply believe there’s a better way of doing it without extracting that much payment from end users, because there are other ways to drive revenues. Patents were used as a weapon to try to stop that evolution and scare people away from lower-cost alternatives. And I think with the Motorola acquisition we’ve shown we’re able to put skin in the game and push back.

Back in June Google executive chairman Eric Schmidt told shareholders that the Motorola purchase was about “the sum of patents, products, the people, and the innovation”, but perhaps Lagerling’s statement indicates that this message has not percolated down to the rest of the company’s senior management. It’s worth remembering that Google actually valued the patents in the deal at $5.5 billion, leaving $7 billion to be accounted for by other stuff. It’s also worth remembering that documents published soon after the deal was announced revealed that the Moto board struck a very hard bargain, while Google had a very limited time to do its due diligence on what it was buying.

If I were a Google investor I might find it slightly disconcerting that different decision makers in the business see the Moto deal in different ways. That suggests a level of confusion about what the drivers were for the acquisition. It’s hard to imagine similar mixed messages coming out of Microsoft or Apple.