Why Google dumped Motorola: Unit's Q4 loss widens to $384M

Motorola, which will eventually be heading to Lenovo, saw its revenue decline as it continued to drag down Google's balance sheet.

Moto G
The low-cost Moto G. Sarah Tew/CNET

If there's any question about why Google sold Motorola Mobility, just look at its fourth-quarter results.

Motorola's results again weighed on Google's profitability, with the unit's operating loss actually widening to $384 million from $152 million a year ago.

Revenue, meanwhile, fell nearly 18 percent from a year ago to $1.24 billion, or 7 percent of Google's total revenue for the period.

Google said Wednesday that it had agreed to sell Motorola to Lenovo for nearly $3 billion. The deal not only gets Google back to its neutral position among handset vendors, but it also clears out what has been a consistent drag on its financial books.

While Lenovo praised the strength of Motorola's brand, the continued decline in the unit's results underscore how far the once-mighty business has fallen. It also suggests that despite the praise that the Moto X and Moto G have received, neither have really made a dent in its declining revenue and mounting losses.

The deal, however, turns Lenovo into the third largest smartphone maker in the world.

Motorola Mobility employed 3,894 people as of the fourth quarter, or 365 less than a year ago.

Google will likely have to suffer through a few more quarters as the deal goes through approval. The company hasn't stated when it will close.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.

 

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