[yohui]

Couldn't it be that Google wanted these patents for their defensive value against Microsoft et al.'s existing patents? IANAL, but it seems to me that co-owning them would be, at best, a wash, as neither company could leverage the patent portfolio against the other.

Moreover, co-owning would not address the issue of how to defend Android (remember that it's handset makers, not Google itself, who have thus far been sued) from Microsoft's other patents.

It's like a game player offering to exchange pieces. At the end of the day, they still have the same material advantage they started with, only with less opportunity for the underdog to turn things around.

Google didn't want to trade pieces; it wanted to win. Obviously, they lost, but it matters in this discussion who they lost to: a coalition of their rivals.

(Regarding the bid numbers: that's irrelevant. $3.14 billion is a very serious offer, no matter how you slice it. Unless you want to suggest that Google wasn't serious about their IPO, because they used the decimals of e.)