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Google Bid Pi Billion Dollars For Nortel Patents

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  • by Anonymous Coward on Saturday July 02, 2011 @10:53AM (#36641424)

    The deal fails when Nortel askes for exact change.

    • If they paid in coins, you might say exact change would be even easier than with dollar bills. No "rounding" required in that case :)
  • by Compaqt (1758360) on Saturday July 02, 2011 @10:55AM (#36641438) Homepage

    Google's CFO's glad they didn't take the next step after pi: tau [google.com] (6.28...)

    • by SEWilco (27983) on Saturday July 02, 2011 @02:02PM (#36642492) Journal

      Google's CFO's glad they didn't take the next step after pi: tau [google.com] (6.28...)

      The CFO's would have been more worried at a bid for $googol [google.com].

    • by Thantik (1207112)

      They could have just gone after 4.66920 the Feigenbaum constant

  • by Anonymous Coward on Saturday July 02, 2011 @11:02AM (#36641486)

    If you're willing to bid $3 billion for something, the last thing you want is for someone to bid $3 000 000 001.00, and beat you in the bid. So it is quite routine for bids on large contracts with a closed bidding process to use unusual numbers rather than round numbers. I've seen this in multi-tens or hundreds of million-dollar land acreage bids for the rights to drill for oil. They'll bid $30 545 777.88, and weird things like that. Usually the "extra bit" is a small percentage of the total bid amount, but if you're going to do that, why not have some fun with it? And if you're "mystifying" the other participants, good! That's the whole point -- to keep them guessing and prevent them from figuring out your strategy so they can't bid $1 more.

    • by couchslug (175151)

      It's common when bidding on Ebay too. If your opponent "thinks round", act differently.

      • by am 2k (217885)

        It's common when bidding on Ebay too. If your opponent "thinks round", act differently.

        It's a bit harder to get creative with the few digits you usually have on eBay :)

  • At best, they were engaged in an advertising campaign that had the potential for being extremely expensive (marketing cost = magic number that became their winning bid - lowest bid that would have won). At worst, they were being extremely foolish with shareholders' money, potentially overpaying by hundreds of millions of dollars just because they think some numbers are cool.

    • This is exactly the kind of behavior I would expect from a group of guys who, once routinely stuffed into their high school lockers, have now grown up (?) to become full-fledged white cat-stroking Bond villains.

      I give it another 6-9 months more of federal government inquiries and subpoenas before they dig a moat around their campus and fill it with laser-headed sharks...

      • What, you mean their Google Apps datacenters don't count? Watching the tour video on youtube, and I think their getting close: Everything from fingerprint/eye readers to camera banks and 24/7 security guards.

    • Well, normally I think companies try and figure a ballpark figure that might be good for their bid. They then round it arbitrarily to "round" numbers that are near their ballpark figure. This is susceptible to the same overpaying problem in that a round number may be greater than the lowest bid the would have won.

      In this case, they were just using universal constants as their round numbers.

      • Well, normally I think companies try and figure a ballpark figure that might be good for their bid. They then round it arbitrarily to "round" numbers that are near their ballpark figure. This is susceptible to the same overpaying problem in that a round number may be greater than the lowest bid the would have won.

        In this case, they were just using universal constants as their round numbers.

        Fair point. If you're right, then MBA's preference for bid amounts ending in lots of zeros is no more efficient than Google's preference for numbers ending in digits other than zero.

    • by swb (14022)

      Maybe they were playing a kind of brinksmanship, forcing competitors to bid higher and higher for patents they needed more than Google did, and thus depriving competitors of cash useful for other operations that are more critical to Google.

      This kind of corporate strategy makes a lot of sense for shareholders -- if you win the auction for a patent crucial to a competitor's product, even if you paid somewhat more than the market value, you deprive a competitor of a technology or force them to license or cross

      • Could be. I think you also help make the case against software patents.

    • by xelah (176252)

      Why is bidding pi billion more foolish than bidding 3.15 billion or 3.10 billion? The aim is to bid slightly more than the second highest bid but less than the value to you of the item. They can only estimate.

      Auctions are quite tricky things. The expected winning bid if everyone is rational and everything is ideal is the second highest valuation of all of the bidders in the room. That's true not just for a standard auction (bids going up, winner is the last one standing), but, on average, for weird kinds of

      • by dkf (304284)

        The expected winning bid if everyone is rational and everything is ideal is the second highest valuation of all of the bidders in the room.

        Ah, but Google have demonstrated that they're transcendental instead of rational.

    • by jrumney (197329)
      Or maybe they just saw other companies putting in irrational bids and decided to join the fun.
  • by tdwebste (747947) on Saturday July 02, 2011 @11:08AM (#36641518) Journal

    All these bids are irrational numbers.

    I think the message is clear. Patents have irrational value.

    • by JamesP (688957)

      No, Google should have bid a complex number.

      So they can split the value of patents between their real and imaginary values.

      Also, no bid would be greater (or smaller) than that one.

      • by Qubit (100461)

        No, Google should have bid a complex number.

        I mean, they kind of did that with their bid of $3.14159 * 10^9 + 0i, right?

        Just imagine what the accountants would have done if The Goog had tried to bid a non-trivial complex number.... probably just complained that they didn't have a column for "i" in their spreadsheet... :-)

        • by ajs (35943)

          No, Google should have bid a complex number.

          I mean, they kind of did that with their bid of $3.14159 * 10^9 + 0i, right?

          Just imagine what the accountants would have done if The Goog had tried to bid a non-trivial complex number.... probably just complained that they didn't have a column for "i" in their spreadsheet... :-)

          These are Google accountants. After they finished determining that the quarter's numbers all lined up with Benford's law [wikipedia.org] they would have complained that the complex number violated type safety constraints and thrown an exception.

        • by LeDopore (898286) on Sunday July 03, 2011 @09:51AM (#36646346) Homepage Journal

          It gets better. If Google borrowed an amount of $ with a nonzero imaginary component, through the miracle of complex number exponentiation eventually the bank would owe *them* money.

          • You are of course assuming that the banks don't know about imaginary and complex number exploitation. How exactly do you think they got a profit out of the greatest financial crash since the Great Depression that they created *and* got bailed out to the tune of $700bn?

  • Had they wanted to continue, would the next bid have been Feigenbaum's (4.669201609) billion?

  • To be sufficiently rich that you can just start spending money is such quantities that both the size, and the specifically chosen value, signal "I don't give a fuck, because I don't have to!"
    • by gl4ss (559668)
      to be so rich? it's investor money they were bidding with, they're just in control of it. as such you'd like to read reasoning for that in quarterly reports, not bullshit about how they saved few tens of millions by their "fx hedging program"(no shit, they really think that's worthwhile info to spend couple of slides on and then just skip over the billion dollar stuff). but did they even want to win the bids? did they have solid reasoning for the bids worth? did they even check what they were bidding on? th
      • by ajs (35943)

        to be so rich? it's investor money they were bidding with,

        It's a mix of investor-provided cash from bond and stock offerings and liquid assets, I would imagine.

        as such you'd like to read reasoning for that in quarterly reports, not bullshit about how they saved few tens of millions by their "fx hedging program" (no shit, they really think that's worthwhile info to spend couple of slides on and then just skip over the billion dollar stuff).

        That's fairly substantial. Just because you don't want to hear about it, doesn't mean it's not important.

        but did they even want to win the bids? did they have solid reasoning for the bids worth? did they even check what they were bidding on?

        That's all been covered previously on Slashdot. This was a key strategic buy that was aimed at growing their patent warchest in order to survive patent challenges against technologies like Android (e.g. the Oracle/Java suit).

        have you noticed how android is not actually letting fresh new players enter the phone market? niche production numbers aside, only the same old moto, samsung, lg, huawei, sony-e etc are in the game and they got their patents and licensing for the patents covered.

        Uh... smartphones were the sole domain of 2 primary players and one "yeah, right

  • Big pies (Score:5, Funny)

    by Groo Wanderer (180806) <charlie@@@semiaccurate...com> on Saturday July 02, 2011 @11:23AM (#36641608) Homepage

    That's a big piece of pi.

                    -Charlie

  • by akm1489 (1703162) on Saturday July 02, 2011 @11:25AM (#36641622)
    Lol, Google guyz are math Maniacs they have already done such stuff in past for many times, i remember 1 they raised their market Cap in 2004 by e-billion dollars $2,718,281,828.
  • WTF Google... (Score:2, Insightful)

    by Anonymous Coward

    We're bidding billions of dollars and we round Pi off at 5 decimal places?

    They should have bid $3,141,592,653.59.

  • Weird! (Score:2, Offtopic)

    by siglercm (6059)

    When I read this article, there were exactly 42 comments posted!

    Oh, damn....

  • You have to wonder if all the wires are plugged in when you make billion dollar bids based on math constants.

    • by Geminii (954348)
      Or if significantly more wires were plugged in than the usual observers are used to seeing.
  • by DNS-and-BIND (461968) on Saturday July 02, 2011 @12:06PM (#36641860) Homepage
    I'll bet dimes to dollars none of the principals on this deal "got it". It's science, after all, and scientists are just manual laborers, in the same sort of class as plumbers. The only good people in society are in finance and top corporate management.
    • by dkf (304284)

      The only good people in society are in finance and top corporate management.

      Why do you draw artificial distinctions between financiers and top corporate management?

    • Actually a lot of people graduate from physics and head straight into finance, if they were clever and had worked out googles strategy, they should have bid Pi+1 dollars.
  • Pi (Score:5, Funny)

    by ukemike (956477) on Saturday July 02, 2011 @12:32PM (#36642004) Homepage
    That's a nice round number.
  • End software patents, leave this consortium with 4.5 billions dollars worth of paper.

    In any case, I hope this deal fails to pass regulatory inspection. Apple monopolizing smartphones with patents is probably worth 10-20 billion to them. No one should be able to monopolize technology. The whole idea of patents made more sense hundreds of years ago when everything was trade secrets, but in the information age it's just a way to create artificial monopolies on certain technologies.

    • by ianare (1132971)

      These weren't software patents, but related to telecommunications : 3g, 4g, networking, etc ... These would have been used defensively by Google to protect Android.

  • by drb226 (1938360) on Saturday July 02, 2011 @02:41PM (#36642742)
    ...to get another news headline on Slashdot? Well it worked.
    • Uh-huh. Because the world's largest online advertising company needs to finesse a story onto Slashdot to gain public awareness.

  • They probably could have bought these patents but obviously they are not worth that much to them. So their competitors paid for these patents more than Google was ready to pay for it, hence, as far as Google was concerned their competitors paid more than the patents are worth.
    Bidding round numbers is a bad idea, you will learn it quickly on eBay (or maybe not since 99% items now are BuyItNow stuff that is cheaper on DealExtreme anyway).

  • They're obviously trolling the patent sale.
  • by Ztream (584474) on Sunday July 03, 2011 @08:09AM (#36646056)

    Google has a sentient bidding algorithm and it's trying to communicate.

"Indecision is the basis of flexibility" -- button at a Science Fiction convention.

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