updated 04:32 pm EST, Wed January 29, 2014
Latest sale less than 25 percent of Google's purchase price in 2012
[Update: Deal confirmed] According to a statement by Google CEO Larry Page, Google and Lenovo have negotiated a deal that will see the search engine sell its Motorola Mobility smartphone business to the Chinese manufacturer. The deal is valued at $2.91 billion dollars, with Google retaining most of the patents it acquired when it purchased the division in 2012.
Google CEO Larry Page said of the deal that "this move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere," noting that Lenovo has both the manufacturing capability and distribution network to grow Android as a product. Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio. When acquired by Google, Motorola mobility had 12,500 patents, with another 7,500 pending.
Google purchased Motorola Mobility for $12.5 billion, including its entire patent portfolio and attendant legal battles, two and a half years ago. Sources claim that Google has been looking to unload the troubled division with falling income, but was forced to retain it to avoid taking a massive tax hit.
Motorola Mobility's Advanced Technology group will be retained by Google, and integrated into its Android development group. Notably, all the patents developed by the group are staying with the search engine, with Lenovo taking a license for them for future use.
Motorola Mobility has been hemorrhaging the search engine's profits since Google's acquisition. While the Google quarterly report isn't until January 30, it is expected that the Motorola Mobility division will continue to be a drag on the company overall. The deal is subject to customary regulatory approval, and will likely not be approved for some time.