Google Sells Motorola at a Major Loss, But Keeps What It Really Wanted All AlongFor the search giant, the sale of its smartphone-making division to Lenovo comes with good news as well as some bad news.

ForGoogleandMotorolaMobility, it's a case of good news and bad news. Less than two years after acquiring the smartphone maker, Google has announced an agreement to sell the company to China-based PC makerLenovoGroup Ltd. for $2.91 billion.

First, the bad news. Google agreed to buy Motorola Mobility in August 2011 for $12.5 billion in cash, or $40 per share at the time. It was Google's largest acquisition. Google selling the company now for less than $3 billion means the company is taking a significant loss.

Financially, things weren't healthy at Motorola Mobility. Despite three rounds of layoffs that eliminated around 6,000 workers, the division was reportedlyon pace to bleed $1 billion a year. So, no big wonder why Google wanted to offload the division to someone who can perhaps scale the business.

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Now, the good news. As part of the deal, Google will retain the vast majority of Motorola'spatents, which the company "will continue to use todefend the entire Android ecosystem," Google co-founder Larry Page wrote in a blog post.

Not only was Google's acquisition of Motorola Mobility a play to supercharge the Android ecosystem, it was a way for Google to take control over Motorola'sportfolio of 17,000 patentsand another 7,000 pending patents. At the time, Android was facing a number of "anti-competitive patent attacks" from companies like Microsoft and Apple.

Last week, Lenovo agreed to purchase IBM's server business for about $2.3 billion.

Google's deal with Lenovo has yet to be approved in the U.S. or China, and that process will likely take some time, as Page noted in his post.

Related:IBM to Sell Server Business to China-Based Lenovo for $2.3 Billion