You don’t have to look very far to find people who have characterized Google’s 2012 acquisition of Motorola Mobility and subsequent sale to Lenovo as a “mistake”:

• Associated Press: “An expensive mistake by Google could turn into a golden opportunity for China’s Lenovo Group”
• US News & World Report: “Google’s Big Bust: Motorola Mobility Sold to Lenovo for Huge Loss”
• Slate: “Google’s Prepared to Sell Motorola at a Huge Loss”
• Wired: “Google Selling Motorola at Multibillion-Dollar Loss”
• Current Analysis: “Lenovo Buys Motorola Mobility, Unraveling Google’s Mistake”

These articles represent a cross section of mainstream media, technology reporting, and even a market research firm focused on the mobile phone industry.  Did they really all get the story wrong?

Each article eventually mentions that Google is retaining most of Motorola Mobility’s patents, although you often have to get through several paragraphs before that fact emerges.  But the patents were what this deal was always primarily about, as evidenced by Google’s announcement after the acquisition and by this leaked email from Larry Page following the sale.

Let’s do some simple math.  Google acquired Motorola Mobility, including its approximately 17,000 patents for $12.4 billion in May 2012 (all figures in US dollars).  They sold the set-top box business (and 1,000 patents) to Arris in December 2012 for $2.35 billion in cash and stock.  And now they’ve sold the handset business (and 2,000 patents) to Lenovo for $2.91 billion.  Now, the purchase of Motorola came with $2.9 billion in cash, so what we’re left with is $4.24 billion for around 14,000 patents.  (You can shrink that number further by taking into account things like $2.4 billion in deferred tax assets Google obtained in the original acquisition, but we’ll set that aside for the sake of this argument.)

According to regulatory filings, Google had valued the original 17,000 patents at $5.5 billion (by far the biggest piece in their valuation of the acquisition).  Now, anyone in the patent licensing business will tell you calculating a per-patent valuation for a portfolio is an over-simplification. But with all necessary disclaimers, this works out to around $294,000 each, and that they paid $303,000 each for the 14,000 they still have.  That’s pretty close to their original valuation.

And does that valuation hold water?  Probably the easiest checkpoint is Rockstar’s purchase of around 6,000 Nortel patents for $4.5 billion.  That’s $750,000 per patent.  (Before you start thinking this means Google may have undervalued the Motorola portfolio, please realize that such a portfolio comparison would be a futile, apples to oranges exercise. And don’t go multiplying your portfolio by $750,000 or $303,000 to try and value it.  Free portfolio valuations are worth what you pay for them.)

The bottom line:  Google never thought the $12.4 billion was just for the patents, but they certainly believed they were the biggest part of acquisition, and any analysis of the sale to Lenovo which doesn’t put the patents front and centre is missing the point.