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Role in patent war

Google

Presented by Madeeha hafeez

Gazanfar Ahmed
Amin Ismaili

Google philosophy
The philosophy of Google is
to be the perfect search engine combined with rapid innovation When you dont know about any thing Just GOOGLE IT !!!

Historical Context
A patent war is a "battle" between corporations or individuals to secure patents for litigation (a process of fighting or defending case in civil court law). The current Smartphone wars started in year 2008. The patent wars is between the largest technology and software corporations like Microsoft, Apple, Google, Samsung, HTC, etc largest technology and software corporations based in the United States, China, Europe, Japan, Korea and Taiwan

According to PC Magazine, Apple brought the patent wars to the Smartphone market by its desire to "go thermonuclear" on Google's competing Android device makers such as HTC, Samsung and Motorola

ANDROID AND GOOGLE


Android began as a stand-alone company founded by Andy Rubin and Chris .Android began as a company developing an open source operating system for digital cameras. Due to failure of determining market need and securing financing, they sold it to Google in July 2005. The demand for Smartphone (high-end mobile phone) emerged . The Smartphone segment accounted for around 13% of all mobile phone sold in 2008. world wide demands for Smartphone's was growing After the purchase of Android by Google and the formation of Open handset Alliance (OHA), the mission changed to deliver an open source operating system for Smartphone devices. On November 5, 2007, the Open Handset Alliance, a consortium of technology companies including Google mobile carriers such as Sprint Nextel and T-Mobile chips manufacturers like Qualcomm and Texas Instruments and device manufacturers HTC and Samsung and application providers

Motorola Mobility -Acquisition


Google has acquired over 100 companies, with its largest acquisition being the purchase of Motorola Mobility, a mobile device manufacturing company. On August 15, 2011, Google acquire Motorola Mobility for $12.5 billion Most of the firms acquired by Google are based in the United States "It's not like Google needed Motorola The Motorola acquisition is really about protecting the Android marketplace from the crazy patent lawsuits," said James Bessen (an expert on innovation and patents and a lecturer at the Boston University School of Law)

In buying the hardware company, Google made clear its desire to acquire the estimated 25,000 patents held by Motorola , which will strengthen Googles patent portfolio.

Google a late comer


Google was loosing its significance in patent war because they started mobile business in 2008, they were late comers in this business push strategy

Google has less patents , so Google is catching-up with the patents of Smartphone's by purchasing 1000 of IBM patents.
that doesn't do much to blunt lawsuits against Android since the patents mainly cover the architecture of memory and micro processing chips rather than mobile operating systems.

Overview of Operating systems for Smartphone's


Operating system Symbian handset software Derivation of old java ME(optional) Backers, Adopters Nokia Sony Ericsson Samsung Motorola Motorola LG Samsung HTC + other members of OHA Microsoft Sony Ericson LG Samsung Apple Software development kit Symbian n signed certification required free development tools Free Open source, License free development tools server

Nokia promotes connection to Ovi servers

Android

Linux OS java SE

Google services

Windows mobile

Windows

Certification available standard MSFT dev tools

Smooth Synchronization with Exchange (outlook) OS X server

iphone

Objective C java

iOS

EVENT TIMELINE Timeline


March 2010 Apple fill a lawsuit against HTC infringing 20 Apple patents (user interface and Smartphone's underlying architecture and hardware. Microsoft strikes license Agreement with HTC to pay Royalties to Microsoft in exchange for the right to sell Android-based devices Background of why GOOGLE BOUGHT MOTOROLA Aug 2010 Oracle files patent and copyright infringement against Google- over the use of java programming language in Android Microsoft sues Motorola for selling Android-based phones furthure it also buys dozen of Smartphone's patent that were formerly owned by palm- expand its patent portfolio Google lost the bid to obtain valuable patents formerly held by Nortel to an industry consordium including Apple and Microsoft Initial biding started from $900 m which was lost by Google by $4.5 b .

April 2010

Oct 2010

July 2011

GOOGLE Acquired MOTOROLA MOBILITY August 2011 Acquire Motorola mobility $12.5 billion-enhance portfolio Samsung agrees not to sell its Android-based galaxy tab 10.1 in Australia until the dispute resolves

September 2011

Samsung vows revenge against Apple by claiming that it will block sales of iphone whenever it goes for sales in their native -Korea

Why they are doing this


Microsoft entered the market late than Google They cant really compete directly so they found patent litigation a way to make Google down Google android shares was about 47% in 2011 Q2 while Microsoft has only 5%.

Porters analysis

Value chain

Competitors in Smartphone industry

INSTITUTIONAL LINKAGES
It includes the;
shareholders of the companys stock, suppliers, trade associations community the government activist groups and the media, all who have their own agendas and responsibilities to the people they serve.

Each has a relationship with Google and has a power to affect Googles decisions. Googles distributed business model ensures that no stakeholder has a level of importance that could singly change the direction of the company,

The way the mass of web users, media, and governments interpret their activity could influence the companys objectives.

It is Googles managements job to ensure the survival of the firm and the long-term benefits of the stakeholders. Litigation and politics often have an effect on both the short-term and long-term results.

Shareholder Pattern
Major Direct Holder
SCHMIDT ERIC E, SHRIRAM KAVITARK RAM, DOERR L JOHN, DRUMMOND DAVID C, PICHETTE PATRICK (For more details, see appendix).

Institutional Holder
VANGUARD GROUP, INC., STATE STREET CORPORATION, BlackRock Institutional Trust Company, JP MORGAN CHASE & COMPANY, Bank of New York Mellon Corporation, etc, etc. (For more details, see appendix).

Mutual Fund Holders


VANGUARD TOTAL STOCK MARKET INDEX FUND, VANGUARD 500 INDEX FUND, PRICE (T.ROWE) GROWTH STOCK FUND INC., GROWTH FUND OF AMERICA INC, etc, etc. (For more details, see appendix).

14%
Institutions and Mutual Fund Holders Individual Direct Holders

84%

STOCK PATRENS

GOOGLE

APPLE

MSFT

Google vs. Direct Competitors


Direct Competitor Comparison
GOOG Market Cap: Employees: Qtrly Rev Growth 236.45B 53,546 0.45 FB 60.08B 4,331 0.32 MSFT 229.64B 94,000 -0.08 YHOO 23.23B 14,100 -0.01 Industry 229.04M 408 0.2

Revenue
Gross Margin EBITDA Operating Margin Net Income EPS P/E PEG (5 yr expected): P/S

47.54B
0.6 15.85B 0.28 10.56B 31.91 22.55 1.31 4.98

4.64B
0.74 1.09B 0.12 524.00M 0.19 143.68 1.98 12.95

72.36B
0.75 28.79B 0.36 15.71B 1.85 14.75 1.05 3.21

4.96B
0.69 1.32B 0.16 3.97B 3.25 6.05 1.56 4.67

131.60M
0.59 13.79M 0.05 N/A 0.05 24.83 1.15 2.39

Financial Highlights

Continue

Future of Google
Google Glass Driverless cars Micro-robot monitor Smart beds Phone calls Robot for parties Home Automation Universal Language translation

YEAR 2012 WITH

Google

REFRENCES
CASES:
Google Inc.Benjamin Edelman, by Thomas R. Eisenmann Symbian, Google & Apple in the Mobile Space (A)

Prediction Markets at Google by Peter A. Coles, Karim R. Lakhani, Andrew McAfee WEB LINKS http://en.wikipedia.org/wiki/Android_(operating_system) http://www.networkworld.com/news/2011/092011-android-patents-251061.html?page=1 http://www.youtube.com/results?search_query=google+role+in+patent+war&oq=google+role+in+patent+war&gs_l=you tube-reduced.3...534368.545696.0.546037.27.27.0.0.0.0.421.3906.8j10j5j0j2.25.0...0.0...1ac.1.Qb0bg1DEGPs http://www.scribd.com/doc/51097249/google-android http://www.spiegel.de/international/business/bild-863213-417254.html

http://www.telecompetitor.com/google-not-dominant-in-search/
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=AAPL http://www.businessweek.com/articles/2012-03-29/apple-s-war-on-android http://en.wikipedia.org/wiki/Societal_views_on_patents http://www.brighthand.com/default.asp?newsID=18149&news=patent+infringement+lawsuits+apple+microsoft+google+ htc+samsung

THANK YOU

APPENDIX

PATENT AS A WEPON
Patents as Strategic Weapons: Patent portfolios values rising rapidly, they are being re-valued as a strategic weapon Patent as a protection Patent is now using as a profit generator.

Patents as Competitive Weapons: Add Costs to Competitors. A patent license fee adds costs to the new entrants product, thereby making its price-point higher for consumers in the marketplace
Raises Funding Risks. The threat of patent litigation can dampen innovation and/or add to its costs, and potentially make it more difficult to get VC funding

ANDROID PHONES
Android was unveiled as its first product, a mobile device platform built on the Linux kernel version 2.6 The first commercially available phone to run Android was the HTC Dream, released on October 22, 2008.

Since 2008, Android has seen numerous updates which have incrementally improved the operating system, adding new features and fixing bugs in previous releases. Each major release is named in alphabetical order after a dessert or sugary treat; for example, version 1.5 Cupcake was followed by 1.6 Donut.
The 4.2 Jelly Bean. In 2010,

Google launched its Nexus series of devices - a line of Smartphone's and tablets running the Android operating system, and built by a manufacturer partner. HTC collaborated with Google to release the first Nexus Smartphone, the Nexus One.

The series has since been updated with newer devices, such as the Nexus 4 phone and Nexus 10 tablet, made by LG and Samsung respectively. Google releases the Nexus phones and tablets to act as their flagship Android devices, demonstrating Android's latest software and hardware features.

GOOGLE stock snap shot


Open $713.97 Day High $718.82 52 Week High 10/5/12 - $774.38 Market Cap 235.2B EPS TTM $32.94 GOOG Does Not Pay Dividends P/E TM 21.7x Shares Outstanding 265.0M 52 Week Low 06/14/12 - $556.52 Average Volume 10 Days 2.5M Day Low $710.52 Previous Close $722.36

Apple stock quotes -22/12/2012


Open $512.47 Day High $519.67 52 Week High 09/21/12 - $705.07 Day Low $510.24 52 Week Low 12/22/11 - $396.10 Previous Close $521.73

Market Cap 488.5B

Average Volume 10 Days 22.3M

EPS TTM

Shares Outstanding

$44.16
EX-Date 11/7/12 P/E TM

940.7M

11.8x

Dividend
$10.60

Dividend Yield
1.02%

Open $27.45 Day High $27.49 52 Week High 03/16/12 - $32.95

Previous Close $27.68 Day Low $27.00 52 Week Low 12/22/11 - $25.48

Market Cap 231.0B

Average Volume 10 Days 52.8M

EPS TTM $2.59

Shares Outstanding 8.4B

EX-Date
02/19/13 Dividend $0.92

P/E TM
10.6x Dividend Yield 3.02%

Porter Diamond
Government
Government Support Innovative & Entrepreneurial culture

Firm Structure and Rivalry


Organic Structure Yahoo, Bing, MSN Apple, Amazon

Factor Conditions (GOOD) Programmer and Software Engineers Related industries


Supply Industry

Demand Conditions
Consumer Sophistication Needs of Nation Distribution channels

Related Industry

Google Strategies
Google establishes strategy to be the Perfect Search Engine.

1.

Innovation Management ; Google allows its Employees to spend (70/20/10 rule)


70% of their time on the core business

20 percent on related projects and 10 percent on unrelated new idea.

2.

characteristic of Google ;
to make webpage clean-off all ads to group all webpage contents together finally is easy-to-access

Organizational structure
This is a hybrid form of functional and multidivisional structure. It ensures the centralized planning a large company needs while giving the small business units the flexibility to innovate like a small start-up

Competitors in search engine

Google Products
Android Google Chrome Chrome book Nexus Google+ ; in competition to Facebook or Twitter

Shareholder Pattern (Appendix)


Major Direct Shareholders
Holder SCHMIDT ERIC E SHRIRAM KAVITARK RAM DOERR L JOHN DRUMMOND DAVID C PICHETTE PATRICK Shares 51,143 87,172 1,628 10,984 10,984

Top Institutional Holders


Holder FMR LLC VANGUARD GROUP, INC. (THE) STATE STREET CORPORATION PRICE (T.ROWE) ASSOCIATES INC BlackRock Institutional Trust Company, N.A. Capital World Investors JP MORGAN CHASE & COMPANY Shares 17,324,529 11,485,598 10,997,226 9,306,355 7,262,268 5,830,186 5,764,959 % Out 6.54 4.33 4.15 3.51 2.74 2.2 2.18 Value* Reported 13,071,357,130 8,665,883,691 8,297,407,017 7,021,644,847 5,479,381,206 4,398,875,337 4,349,661,565 29-Sep-12 29-Sep-12 29-Sep-12 29-Sep-12 29-Sep-12 29-Sep-12 29-Sep-12

Bank of New York Mellon Corporation Invesco Ltd.


NORTHERN TRUST CORPORATION

4,559,855 4,244,249
3,848,514

1.72 1.6
1.45

3,440,410,597 3,202,285,870

29-Sep-12 29-Sep-12

2,903,703,813 29-Sep-12

Top Mutual Fund Holders


Holder FIDELITY CONTRAFUND INC VANGUARD TOTAL STOCK MARKET INDEX FUND Powershares Exhg Traded Fd TrPowershares QQQ Tr, Series 1 VANGUARD 500 INDEX FUND VANGUARD INSTITUTIONAL INDEX FUND-INSTITUTIONAL INDEX FD SPDR S&P 500 ETF Trust FIDELITY GROWTH COMPANY FUND PRICE (T.ROWE) GROWTH STOCK FUND INC. VANGUARD/PRIMECAP FUND Shares 5,960,521 3,269,057 % Out 2.25 1.23 Value* 3,772,830,977 1,896,281,893 Reported 30-Jul-12 29-Jun-12

2,832,612 2,432,194

1.07 0.92

1,792,958,417 1,835,090,373

30-Jul-12 29-Sep-12

2,394,836 2,225,230 2,052,448 1,841,500 1,755,425

0.9 0.84 0.77 0.7 0.66

1,806,903,762 1,408,503,833 1,299,138,010 1,068,198,905 1,324,468,162

29-Sep-12 30-Jul-12 30-Jul-12 29-Jun-12 29-Sep-12

GROWTH FUND OF AMERICA INC

1,754,236

0.66

1,017,579,676

29-Jun-12

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