Global tech titan Google Inc. wants to scoop up the Nortel Networks patent portfolio, and is willing to pay at least US$900 million for the package -- which provides legal rights to a broad range of telecom technologies.
Google's so-called stalking-horse offer, for what is practically the last major asset to be sold by the fallen Canadian technology giant, will be the opening bid in an auction that could push the final price higher, Nortel announced Monday.
"This is an unprecedented opportunity to acquire one of the most extensive and compelling patent portfolios to ever come on the market," said George Riedel, chief strategy officer and president of business units for Nortel.
"We look forward to what we hope will be a robust auction, following the requisite court approvals, currently expected to be held in June 2011."
Nortel said it has already held a confidential, multi-round bidding process to establish the stalking-horse bid -- a process the company has used previously to sell off its other major business operations under court supervision.
Kent Walker, Google's general counsel and a senior vice-president for the California-based company, posted a blog comment that described its bid for Nortel's patents as a defence against "an explosion in patent litigation."
"Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories," Walker wrote.
"So after a lot of thought, we've decided to bid for Nortel's patent portfolio in the company's bankruptcy auction. Today, Nortel selected our bid as the "stalking-horse bid," which is the starting point against which others will bid prior to the auction."
If successful, Google hopes the Nortel patents will help it and its partners to innovate and also "create a disincentive" for others to sue Google, Walker said.
The ultimate monetary value of Nortel's patents may be difficult to judge, since that would depend on how useful they are in making products that generate revenue.
Although Nortel was by far Canada's largest spender on research and development, some of its work ended up as technological dead-ends -- at least temporarily -- while at other times it was so advanced that it would take years to determine whether it would be a market winner.
Ten years ago, at its height, Nortel was among the world's most advanced developers of telecom equipment. It was felled by numerous problems, including changing market conditions, economic upheaval and an accounting scandal.
Much of Nortel's research and development was done in Ottawa, at a facility formerly known as Bell Northern Research, although Nortel also had research facilities scattered throughout the world.
The agreement with Google includes the planned sale of approximately 6,000 patents and patent applications including fourth-generation wireless, data networking, optical, voice, Internet, semiconductors and other patent portfolios.
Google (Nasdaq:GOOG) is best known for its Internet search engine but it has been moving into other areas of the technology market, including telecom.
Google's Android operating system for smartphones and tablet computing devices has been rapidly making headway in the market against Apple's iPhone and iPad and other products by Nokia, Microsoft and Research In Motion (TSX:RIM).
Research In Motion, which has replaced Nortel as Canada's flagship tech company, had been considered a potential bidder for Nortel's patents.
However, even RIM's new PlayBook acknowledges the growing influence of Android. The Canadian company's challenger to Apple's iPad will eventually be able to run Android applications.
http://www.cp24.com/servlet/an/local/CTVNews/20110404/110404google/20110404/?hub=CP24Home
Google's so-called stalking-horse offer, for what is practically the last major asset to be sold by the fallen Canadian technology giant, will be the opening bid in an auction that could push the final price higher, Nortel announced Monday.
"This is an unprecedented opportunity to acquire one of the most extensive and compelling patent portfolios to ever come on the market," said George Riedel, chief strategy officer and president of business units for Nortel.
"We look forward to what we hope will be a robust auction, following the requisite court approvals, currently expected to be held in June 2011."
Nortel said it has already held a confidential, multi-round bidding process to establish the stalking-horse bid -- a process the company has used previously to sell off its other major business operations under court supervision.
Kent Walker, Google's general counsel and a senior vice-president for the California-based company, posted a blog comment that described its bid for Nortel's patents as a defence against "an explosion in patent litigation."
"Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories," Walker wrote.
"So after a lot of thought, we've decided to bid for Nortel's patent portfolio in the company's bankruptcy auction. Today, Nortel selected our bid as the "stalking-horse bid," which is the starting point against which others will bid prior to the auction."
If successful, Google hopes the Nortel patents will help it and its partners to innovate and also "create a disincentive" for others to sue Google, Walker said.
The ultimate monetary value of Nortel's patents may be difficult to judge, since that would depend on how useful they are in making products that generate revenue.
Although Nortel was by far Canada's largest spender on research and development, some of its work ended up as technological dead-ends -- at least temporarily -- while at other times it was so advanced that it would take years to determine whether it would be a market winner.
Ten years ago, at its height, Nortel was among the world's most advanced developers of telecom equipment. It was felled by numerous problems, including changing market conditions, economic upheaval and an accounting scandal.
Much of Nortel's research and development was done in Ottawa, at a facility formerly known as Bell Northern Research, although Nortel also had research facilities scattered throughout the world.
The agreement with Google includes the planned sale of approximately 6,000 patents and patent applications including fourth-generation wireless, data networking, optical, voice, Internet, semiconductors and other patent portfolios.
Google (Nasdaq:GOOG) is best known for its Internet search engine but it has been moving into other areas of the technology market, including telecom.
Google's Android operating system for smartphones and tablet computing devices has been rapidly making headway in the market against Apple's iPhone and iPad and other products by Nokia, Microsoft and Research In Motion (TSX:RIM).
Research In Motion, which has replaced Nortel as Canada's flagship tech company, had been considered a potential bidder for Nortel's patents.
However, even RIM's new PlayBook acknowledges the growing influence of Android. The Canadian company's challenger to Apple's iPad will eventually be able to run Android applications.
http://www.cp24.com/servlet/an/local/CTVNews/20110404/110404google/20110404/?hub=CP24Home
