...------------------------------------------------- Acquisition Presented by Professor: Course: ACC 401 Advanced Accounting Date: This is a discussion of the recent acquisition by Google, Inc., a publically traded U.S. multinational corporation, of Motorola Mobility, another multinational corporation. We will briefly describe in general terms, the acquisition of Motorola by Google, including analyzing the accounting requirements for such acquisition, and the various accounting challenges in preparing the financial statements for the consolidation of the subsidiaries on the date of acquisition. Furthermore, the paper will evaluate the amount of goodwill or other intangible assets derived from the transaction, including providing an in-depth explanation as to whether financial value was created by such acquisition. Additionally, other special issues will be analyzed, including the implications of changes in ownership, insolvency, liquidation, the reorganization resulting from such acquisition, and identification of the key accounting areas of difference for the acquisition reporting material to the profitability of the combined entity. Overall, this paper will conclude that Google’s acquisition of Motorola was significantly positive in terms of value within the wireless carrier market, and in terms of global goodwill. As reported by the Wall Street Journal, on August 16, 2011, the multinational company Google had completed a $12.5 Billion deal to acquire Motorola Mobility’s cellphone business...
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...Acquisition of Motorola Mobility by Lenovo Md Asifur Rahman Khan Executive Summary This report is on the Acquisition of Motorola Mobility by Lenovo. The main purpose was to know about the acquisition of Motorola mobility by Lenovo, Background of the acquisition, and consequences of the acquisition and the Financial and Human Resource Impact of Holder and Subsidiary Company. This report intends to show these above mentioned factors in Lenovo and Motorola Mobility Acquisition. Introduction Mergers And Acquisitions - M&A' A general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed. The main reasons of Merger or Acquisition are to join forces to strengthen market position, cut back cost, diversification or to share technologies, ideas, expertise for future growth of the companies Company Profile Lenovo is one of the world's leading personal technology companies, producing innovative PCs and mobile internet devices. A global Fortune 500 company, Lenovo is the world's largest PC vendor and fourth largest smartphone company. Lenovo is a US $47 billion personal technology company with more than 57,000 employees (including joint ventures) in more than 60 countries serving customers in more than 160 countries. Lenovo is a global company that is incorporated and headquartered in Hong Kong...
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...Acquisition of Motorola Eric Brown Dr. Ross Contemporary Business February 13, 2014 Acquisition of Motorola Google’s acquisition of Motorola Google announced on August 15, 2011 that it will acquire Motorola Mobility Inc. (MMI), for a sum of $12.5 billion. This was a vertical form of merger as the supplier (software provider) acquired its hardware client (Motorola). Reasons for acquiring MMI * Google’s android operating system has been sued by companies like Microsoft and Apple for patent infringement. The company sought access to just MMI’s patents and hence ensured the independence of MMI as a separate company. * MMI is a big market player for mobile phones hardware. Its phones with Android platform proved to be huge success. Joining hands with Google will increase its ranking in the market. * MMI’s smartphone sales increased over the past year. Here, Google had a big opportunity to improve its share in the smartphone market. * MMI had developed and launched many breakthrough products over the years. MMI was the first company to introduce portable cellphones. Google hoped to benefit from technological innovations of MMI. * The two companies will be integrated to provide complete mobile phones and thus they will be better able to compete in the market with other top players. Impact of the deal The two companies together were expected to accelerate innovation and choice in mobile computing. Since Motorola is good at devices and Google is good...
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...December 5, 2011 To: Google Management Subject: Google Corporate Strategy Larry, this summarizes our analysis of Google’s current corporate strategy and outlines recommendations to guide future strategic decisions in Google’s incredibly volatile marketplace. Our goal is to help identify where Google’s environment is shifting and how Google can respond proactively to continue the market-beating growth and profitability of past years. Recommendations: 1. Google should continue with its acquisition strategy, utilizing the 70/20/10 plan, and internal operations with refined real options approach. 2. Use the Motorola Mobility acquisition to stage growth by entering the mobile hardware market. The integration of hardware and software capabilities opens a huge door for the company. While understanding the importance of advertising revenue to Google and the need to sustain it, the timing is right to diversify revenue streams and monetize the Android platform through the manufacture of integrated Google phones. This recommendation is important as a means of protecting Google from experiencing the preverbal paradox of success. Moving into mobile manufacturing also helps diversify Google’s revenue stream as Google finds itself losing advertising revenue to other websites, such as Facebook, Netflix, and others. Thus, beyond the importance of protecting Google’s right to make the Android operating system through the acquisition of 17,000 patents, a move which ultimately protects...
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...growth.” 1. What was Google really interested in? In 2012, almost two years ago, Google announced that it was purchasing Motorola Mobility for $12.5 billion. This resulted in a perplexing event. Google was acquiring a huge company, whose great patent portfolio may provide the company with valuable intellectual properties that would allow the company to compete more directly against Apple, Microsoft and other companies in the market. The objective was to protect the Android Operating System mainly from Apple’s Mac OS, Windows OS and other companies. Android was under an ongoing patent war with these companies. Motorola acquisition meant Google got 17,000 patents. Even though Google mainly bought Motorola Mobility for its patents, other reasons made the decision more consistent: the combination of these two companies will probably accelerate innovation and choice in mobile computing. This could yield to enhancements in phones, and at the same time decreases in prices. 2. What did Google really buy? Only the patents or the whole company? Although Google was only interested in its patents, Google bought the entire company. It is already operating Motorola as an independent entity, rather than absorbing it as a hardware arm of Google. 3. How much did Google pay for the operation? Motorola was drastically cutting back its production and selling products in far fewer countries. This bad situation made it easier the transaction. Google acquired Motorola Mobility for $12.5 billion...
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...Final PDF to printer case 6 Google’s Strategy in 2013 JOHN E. GAMBLE Texas A&M University – Corpus Christi Google was the leading Internet search firm in 2013, with nearly a 67 percent market share in search from home and work computers and a 97 percent share of searches performed from mobile devices. Google’s business model allowed advertisers to bid on search terms that would describe their product or service on a cost-per-impression (CPI) or cost-per-click (CPC) basis. Google’s search-based ads were displayed near Google’s search results and generated advertising revenues of more than $43.6 billion in 2012. The company also generated revenues of about $2.4 billion in 2012 from licensing fees charged to businesses that wished to install Google’s search appliance on company intranets. In addition, a variety of new ventures contributed to the company’s consolidated revenues. The most notable of which was the company’s recently acquired Motorola Mobility division that contributed revenues of $4.1 billion in 2012. New ventures such as the acquisition of Motorola’s smartphone operations were becoming a growing priority with Google management since the company dominated the market for search-based ads and sought additional opportunities to sustain its extraordinary growth in revenues, earnings, and net cash provided by operations. Another important initiative under way in 2013 was Google’s cloud computing productivity package that was intended to...
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...1) In 2013 Google was the leading Internet search firm. Google owned 67 percent market share in search from home and work computers and a 97 percent share of searches performed by mobile devices. The two main competitors for Google in the search engine industry for market share is Microsoft Corporation’s Bing and Yahoo Inc.’s search. (Blystone, 2015). Google is well known and a leader in the search engine industry that the company became a verb. When people search for something on the Internet such as for a recipe they say, “ I goggled the recipe” (Blystone, 2015). The competition in the search engine industry for Google does come from the two related search engines yahoo search and Bing. However, the major competition in the search engine industry stems from searches with in websites and apps that offer more than just searches, such as Amazon, Inc. and Facebook, Inc. For example, Facebook Inc.’s CEO Mark Zuckerberg articulated that the company’s assets could be used to compete with search engines. Facebook Inc. can compete with search engines by the website uniquely being positioned to answer questions people may have such as, what sushi restaurants my friends have been to recently and liked? These query-based searches that can be done on Facebook potentially offer consumer something they could not do anywhere else (Blystone, 2015). Apple Inc. also created feature and operating system on their iPhone, iWatches, and Apple TV Siri that acts as a virtual personal assistant. With...
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...UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012 OR ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 000-50726 Google Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 77-0493581 (I.R.S. Employer Identification No.) 1600 Amphitheatre Parkway Mountain View, CA 94043 (Address of principal executive offices) (Zip Code) (650) 253-0000 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Class A Common Stock, $0.001 par value Nasdaq Stock Market LLC (Nasdaq Global Select Market) Securities registered pursuant to Section 12(g) of the Act: Title of each class Class B Common Stock, $0.001 par value Options to purchase Class A Common Stock Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No È Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or...
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...Business Analysis Part II MGT521 November 14, 2011 James Bingel Business Analysis Part II Introduction This paper will provide a review of Motorola Mobility Inc.'s (MMI) financial statements to determine the financial health of the company. MMI's financial health will be compared to that of Nokia and Research in Motion (RIM), two companies within the large-cap range ($5 - $50B). A benchmarking analysis will also be performed, using Apple as the benchmark for it products, processes, and best practices. Financials Income Statement - A review of MMI's income statement reveals that it has been operating at a net loss for the last three quarters, from a net loss of eighty one million dollars for the quarter ending April 2, 2011, to a thirty two million dollar loss for the quarter ending in October 1, 2011. While it is operating at a loss, the amount of the loss has decreased the last three quarters, while revenues have been relatively flat, indicating that MMI is moving toward reducing their expenses, and may look to operate at a profit for the fourth quarter of 2011. Comparatively, Nokia has also been operating at a loss for the 2nd and 3rd quarters of 2011, and RIM has been averaging $722M in profit over the last five quarters. RIM however has had a decline in total revenue, from $5.4B for the period November 27, 2010 to $4.2B for the period August 27, 2011. Balance Sheet - MMI's balance sheet reveals the company has almost nine and a half billion dollars in total...
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...similar changes. The two companies I picked up for comparison were Nokia and Motorola. There reason behind choosing these two companies is that both the companies were taken over by some big heads in the technology market, Microsoft bought Nokia and Google bought Motorola and it was happened almost at same time. So I believe this would be the best comparison that I can do from the recent times. When Microsoft acquires Nokia then it started releasing products with the name Microsoft in place of Nokia, for example Nokia Lumia is one of the best model in phone sector but after acquisition mobile phones were releasing in to the market as Microsoft Lumia. That was the huge change happened to Nokia in recent times. When Google bought Motorola with in few days it was sold out to Lenovo, of course there was some business strategy behind this drama regarding some patents and licenses hold by Motorola. The main change we can observe in both of the companies is the change in management. That’s what makes me to do research on this topic with lot of interest, and also as I came from IT background, I use to follow these topics regularly and that turns in to my course project topic. References: Lerato raloobo, 2014 Goodbye Nokia, Welcome Microsoft Mobile retrieved from http://newstonight.co.za/content/goodbye-nokia-welcome-microsoft-mobile”. Sascha segan, (2014)5 Reasons Why Google Sold Motorola, and 5 Reasons Why Lenovo Bought. Retrieved from...
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...5) Zagat’s acquisition by Google make it more Competitive Google’s most notable recent acquisitions and initiatives are Google Play which are a recently launched entertainment application for music, television, and movies, Google Fiber where a fiber optic Internet network capable of reaching connection speeds of up to 1,000 Mbps and Google Drive is a cloud-storage and group collaboration workspace integrated with Gmail and Google Docs. Google’s acquisition with Motorola Mobility be the centerpiece of the company’s push into mobile and communications hardware. Motorola Mobility will be run as a separate company whose wares are intended to complement the Google’s Android platform. Google had been in talks to acquire Yelp in late 2009, but those discussions fell apart and Yelp walked away from some $500 million. Since then, the relationship between Google and Yelp has been tenuous, as Google borrowed liberally from Yelp’s database of reviews to flesh out its Google Places pages. However On September 2011, Google Inc paid $151 million in cash for the Zagat Survey. Google bought the Zagat Survey to counter the popularity of Yelp's business rating service. Google’s annual report shows that it already acquisitions of 57 companies. Google's vice president of Local, Maps and Location Services, Marissa Mayer stated that Zagat will be a cornerstone of Google local offering and delighting people with their impressive array of reviews, ratings and insights, while enabling people everywhere...
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...Google, the world's most powerful brand, endeavors to purchase Netflix, the largest U.S. based online movie rental service provider. This acquisition is consistent with the Google focus on improving how people connect with information. The acquisition will address a strategic opportunity to deliver more diverse online content to the world, where the graphical and video display-ad market is estimated to grow to $200 billion (Efrati, 2012). It will also further build on the expansive Google acquisition model strategy and use of capital (Rosoff, 2012). Google enjoys proven success and market dominance in online advertising. With its graphical and video advertising successes through its YouTube platform and thousands of other sites, the company has established a significant competitive advantage in the market of display-advertising. With Netflix, Google would leverage its ad expertise to pair advertisements with video search requests and video themes/genres. This acquisition will continue the Google growth model of winning loyalty across every facet of the internet experience which translates into "overall time spent on Google services,[...]more time (for consumers to be) exposed to ads, [and] increased brand loyalty (Young, 2011). The acquisition would provide a diversified monetization model of membership/fee based service which provides strong direct customer and revenue competition to Hulu (streaming video currently offered only to users in Japan and the USA and its overseas...
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...PRODUCTION (IJM&P) http://www.ijmp.jor.br ISSN: 2236-269X v. 5, n. 3, June - September 2014. MICROSOFT ACQUIRED NOKIA IN UNIPOLAR OPERATING SYSTEM MARKET Netra Pal Singh Management Development Institute, India E-mail: knpsingh@mdi.ac.in Submission: 13/11/2013 Revision: 05/01/2014 Accept: 10/01/2014 ABSTRACT The recent big tickets include Microsoft acquiring part of Nokia for US$ 7.2 billion, Verizon buy 45% stake in Vodafone for US$130 billion, Google acquiring Motorola for 12.5 billion. These buyouts are analyzed and commented by experts of the industry. This research paper attempted to collate their view in the context of Microsoft and Nokia deal on six parameters. These parameters are (i) reasons for the downfall of the Nokia market share, (ii) general comments of the experts, (iii) similarities / dissimilarities of past and business models of the smartphone business, (iv) reasons for Microsoft to buy out Nokia, (vi) impact of buyout on Microsoft, Nokia, consumers and markets. In addition, paper discusses the existing theories of merger & acquisition in telecom sector in the past. Keyword: Smartphone, Microsoft, Nokia, HERE Maps, Galaxy, Lumia, Synergy Trap Hypothesis. [http://creativecommons.org/licenses/by/3.0/us/] Licensed under a Creative Commons Attribution 3.0 United States License 598 INDEPENDENT JOURNAL OF MANAGEMENT & PRODUCTION (IJM&P) http://www.ijmp.jor.br 1. ISSN: 2236-269X...
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...research and examination of the financial statements and reported performance of Google Incorporated’s, I will provide a detailed analysis of Google’s financial information. In addition, I will describe Google as a publicly traded company in the United States and explain its current financial situation (please see Appendix for financial statements). This description will include information on the company’s business goals, its operations, locations, markets and line of business. Then I will assess Google’s vulnerability to specific financial threats as well as explain how certain financial trends will influence future financial performance. Lastly, I will analyze the company’s stock and determine how it will perform in future periods. Google Incorporated is a global technology company that helps people to connect information from various locations around the world. Larry Page and Sergey Brin founded Google Inc. in 1998. The company was incorporated on September of the same year. Google’s initial public offering was 19,605,052 shares of Class A common stock. This initial public offering took place on August 18, 2004. Google Inc. has revolutionized how the internet is used and perceived. Google’s main source of revenue is advertising and most of this business comes from the United States. They have several different aspects to their business. It started with the simple www.google.com search engine. Now Google has an email service, mapping and directions site, various applications, and...
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...April 13, 2012 Technology Google Inc. Ticker: GOOG Current Price: $630.84 Recommendation: Buy Implied Price: $688.77 Investment Thesis Key Statistics 52 Week Price Range 50-Day Moving Average Estimated Beta Dividend Yield Market Capitalization 3-Year Revenue CAGR $473.02 - $670.25 $XX$XX.XX $624.35 1.09 N/A $205.1 billion 20.26% Google’s market leading search engine will allow the company to continue to grow their advertising revenues domestically and internationally. As the internet continues to grow in popularity, demand for Google’s advertising services will continue to increase. With over 250 million mobile devices running Google’s Android operating system, and 850,000 being activated each day, any successful monetization of this system will result in substantial profits. Google’s culture of innovation will allow Google to continue to grow and remain a leader of the technology sector. Trading Statistics Diluted Shares Outstanding Average Volume (3-Month) Institutional Ownership Insider Ownership EV/EBITDA 325 million 2.647 million 81.80% 0.42% 9.2x Google Inc. (5- Year) Margins and Ratios Gross Margin EBITDA Margin Net Margin Debt to Enterprise Value Leverage Ratio 70.00% 39.25% 27.37% 2.55% 0.2x Covering Analyst: David Douglas 1 University of Oregon Investment Group University of Oregon Investment Group April 13, 2012 Business Overview Google Inc. was started in 1998 by two Stanford University students attempting to...
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