Google Bids Rationally: The Motorola Win
September 14, 2011
I remember reading Google papers about how to run an auction. The point of these open source documents was to disclose numerical recipes for sophisticated bidding. The idea was to use data to derive maximum benefit from an auction, bid, or deal. I recall that humans were involved, but the Google method emphasized the system and method of logic. Emotion was for the folks who wanted a hot word for an ad.
Well, now we know that those papers were applicable to many situations just not to the Motorola bid if the information in “Google Upped Its Bid for Motorola by $3B in One Day to Close Deal” is accurate. According to the write up:
In order to secure its purchase of Motorola and the company’s collection of patents, Google outbid itself by 33 percent, or $3 billion, in a single day to reach an agreement.
I don’t want to make a statement that may come back to bite me on the ankle. Consequently I will not point out that “data” which supports a $3.0 billion boost in a bid when there are no other bidders is pretty magical information. Nor will I point out that when one bids against oneself, there are some chapters I recall reading in my Psychology 101 textbook which may be applicable.
Let’s just leave it at $12.5 billion for Motorola Mobility when the only other bidder was oneself. Rational? Okay by me. The strategy worked.
Stephen E Arnold, September 14, 2011
Sponsored by Pandia.com
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