Why would Google pay $12.5 billion for Motorola? It cost them 18 months of their profits. It's 3 times what Apple, Microsoft, and a consortium of others paid for Nortel's patents. It's 10 times what HP paid for Palm. Hell, Google is guaranteeing twice as much in break-up penalty alone as HP paid for Palm. Why would a smart company like Google, one that's already sunk untold resources into an OS they essentially give away for free, spend so much of their capital on a single Android licensee for whom profitability is a somewhat distant memory?
Patents is the throw away line, the canard Larry Page foisted at the end of his blog post and the sound bite rival Android ODMs repeated, Stepford-like when welcoming Motorola's new overlord to the Open Handset Alliance table. Were Motorola's patents worth 3 times Nortel's? Were they worth 10 times Palm's? (Especially considering Apple and Microsoft are already suing Motorola and Palm's patents are such that there hasn't even been a whisper of patent-suit in their general direction?)
Likewise set top boxes. Apple calls Apple TV a hobby. Google TV could, perhaps, charitably fall into that category as well. Granted, getting Android software onto the actual cable box is more compelling than an iOS box in addition to a cable box, but the key word in all these equations is "cable". Both traditional land-based cable companies (most of which are monopolies) and satellite companies, (which are duopolies or oligopolies), have vested interests in control and content and they're the ultimate arbiter in which boxes they offer and to whom. (TiVo and Windows Media Centers with cable cards haven't fought their way out of that paper bag yet either.) Is that business worth $12.5 billion?
Let's get Oliver Stone about this for a minute and look at a) where Google makes their money, and b) the historical reason for Androids existence and continued development.