Google's Motorola mates

Nokia and Research In Motion shares hitched a ride on Google's bid for Motorola Mobility. But will their patent portfolios save the troubled handset makers from their downward spiral?

Search engine giant Google caused quite a stir in the markets overnight with its $US12.5 billion takeover of Motorola Mobility. The deal still has to get past regulators but that was never going to stop Motorola's shares from rocketing. The stock finished the session 55 per cent higher at $US38.15 thanks to the healthy premium Google put on the table.

Interestingly, troubled handset makers Nokia and Research in Motion (manufacturer of Blackberry) were also boosted in the commotion, with their shares prices finishing the session 17 per cent and 10 per cent higher, respectively.

Bizarrely, the share price rises in the latter two are arguably more reliable than that of Motorola. It's perfectly understandable why investors jumped on Motorola but they'll have to take their chances with regulators who will have some antitrust issues with the proposal, particularly as it's coming from Google.

Nokia and RIM on the other hand have benefitted from the increased valuations that are now attached to their patent portfolios, which won't be impacted if regulators decide to knock Google's offer on the head. Nokia is particularly well placed after its strategic tie-up with Microsoft.

Then again the sudden share price spike in both these companies does not change the fundamentals: The product offerings from both companies lack consumer support and, as you can see, both are well down this year, whereas Motorola is now back in the black.