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Apple and Microsoft combine to outbid Google for Nortel patents

July 05, 2011 By: Dr Search Principal Consultant at the Search Clinic Category: Apple, Customer Service, Google, Microsoft, Mobile Marketing, mobile phones, smart phones, Tablets, Technology Companies, Uncategorized

A portfolio of 6,000 patents was auctioned to realise some value from the assets of bankrupt telecoms firm Nortel.
Apple and Microsoft combine to outbid Google for Nortel patentsGoogle lost the auction as a consortium including Apple and Microsoft made the winning bid of £2.8 billion.

The sale of the patent portfolio started as a five way scrap and boiled down to  two separate combined consortia and individual firms including Google and Intel.

Initial estimates suggested the portfolio would attract around £1.24 billion but the four days of intense bidding saw the total rise sharply.

As the bids got bigger some firms dropped out and others became partners to pool their resources. From going it alone, Apple joined a consortium that included Microsoft, Research In Motion and Sony.

Ultimately the portfolio was being fought over by two groups: Google and Intel on one side and the Microsoft/Apple-led consortium on the other.

Google’s bids for a pool of wireless patents were based on unusual mathematical theorems. During the sale, Google’s bids were based on pi, other constants and the distance between the Earth and the Sun.

“Google was bidding with numbers that were not even numbers,” a source involved in the auction told the Reuters news agency.

During its bids, Google picked numbers including Brun’s constant and Meissel-Mertens constant that were said to have “puzzled” others involved in the auction. When bids from rivals hit $3bn, Google reportedly bid pi, $3.14159bn, to up the ante.

“Either they were supremely confident or they were bored,” Reuters’ source said.

It is not clear what inspired Google to draw on obscure mathematics for its bids. However, Google co-founder Sergey Brin is widely acknowledged to be a maths prodigy and the bids may reveal his influence.

Currently Google had about 700 patents in its mobile portfolio, many of which relate to using handsets to serve its core competences such as search.

By contrast, he said, the Nortel patents relate to future technologies that will make mobile networks faster and handsets more powerful.

Owning the patents could also ease the burden on firms making Android devices as they would have fewer licence fees to pay.

Use of Android technology from Google is free provided handset makers pipe traffic back to the search giant so it can make money with adverts.

However, the numbers of companies asking for cash to use the non-Google developed technologies found in Android phones was rising, he said.

For instance, Microsoft has announced licensing deals with many Android phone makers including General Dynamics and HTC.

With the control of the patents passing to a consortium that includes firms that are Google’s bitter rivals in the mobile phone world, licence fees could increase.

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