As reverse termination fees go, this one is massive. According to Bloomberg, it’s about 26 percent of the transaction’s enterprise value and more than six times the typical termination fee, which tends to be about 3.8 percent of the value of the deal to which it will be applied.

Why such a large fee? Presumably, Motorola Mobility demanded it out of concern that the U.S. Federal Trade Commission — which is already investigating several aspects of Google’s business — will hold up the deal or refuse to approve it.

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This morning, the company announced plans to stop selling its Nexus One Android phone through its Web store, acknowledging that efforts to change the way consumers purchase phones haven’t quite played out the way it had hoped.

“While the global adoption of the Android platform has exceeded our expectations, the web store has not,” Google’s Android chief, Andy Rubin, wrote in a post to the company blog. “It’s remained a niche channel for early adopters, but it’s clear that many customers like a hands-on experience before buying a phone, and they also want a wide range of service plans to chose from.”

And so Google (GOOG) is redoubling its efforts to sell the Nexus one through existing retail channels, just like everyone else. And once it has pushed availability to a certain point, its Nexus One Web store will become a “store window” for showcasing a variety of devices running its Android OS.

News of the impending closure follows decisions by Verizon (VZ) and Sprint (S) to dump the Nexus in favor of newer Android devices like the Droid Incredible and EVO 4G.

Did those moves have something to do with Google’s decision? Clearly, although there were certainly other factors at work. The phone’s dueling early-termination fee and half-assed customer-service solution certainly played a role. And then there were the mediocre sales.

The only way Google was ever going to succeed in upending the consumer-carrier relationship was with a deluge of consumer demand. And that never really happened.

So was Google’s strategy for the Nexus One doomed from the beginning? Probably. Customer behavior is a tough enough thing to change. Disincentives like Google’s questionable customer support and a pair of early termination fees on a device Google was asking us to buy without even touching it certainly didn’t help.

But for those who are interested in the iPad but haven’t yet ordered one, there are two primary questions: Should you buy a Wi-Fi iPad or wait until the 3G version comes out later this month? And should you buy a first-generation iPad at all or wait for improvements?

The New York Times (NYT) had a good rundown of what to consider if you’re deciding between a Wi-Fi only iPad and an iPad with 3G, which would allow the device to be used on AT&T’s (T) cellular network. Part of the decision has to do with price: The 3G versions cost $130 more than comparable Wi-Fi versions. There’s also the cost of 3G phone service to think about–$15 to $30 a month, although there is no contract or termination fee.

Read the rest of this post on the original site

From the Nexus One Terms of Sale:

You agree to pay Google an equipment subsidy recovery fee (the “Equipment Recovery Fee”) equal to the difference between the full price of the Nexus handheld device without service plan and the price you paid for the Nexus handheld device if you cancel your wireless plan prior to 120 days of continuous wireless service. For example, if the full price of the Nexus handheld device without service plan was $529 USD and the price you paid for the Nexus handheld device was $179 USD with a service plan, the Equipment Recovery Fee you pay will be $350 USD in the event you cancel within the first 120 days of carrier service….

You agree that the Equipment Recovery Fee is not a penalty but is for liquidated damages Google will incur as a result of such cancellation. These damages may include, but are not limited to, loss of compensation and administrative costs associated with such cancellation or changing of wireless service provider(s), market changes, and changes in ownership. Please note that the Equipment Recovery Fee is imposed by Google and not your chosen carrier and is in addition to any early termination fees that may be charged by your chosen carrier [emphasis added] in connection with termination of your wireless plan prior to fulfillment of your chosen carrier’s service agreement term.

The costs of canceling a T-Mobile Nexus One contract within the first four months after purchase, then, are as follows:

• $179 USD, the purchase price of the device.
• $200 USD, the early-termination fee T-Mobile assesses for contracts canceled with more than 180 days remaining on term
• $350 USD, Google’s equipment recovery fee

Grand total: USD $729.

That’s $200 more than the cost of the device unsubsidized.

So if you’re unhappy with the Nexus One you purchased on contract, do yourself a favor and wait at least four months before terminating it.

What was it that Google VP of Engineering Andy Rubin said last week? Something about making the cellphone purchasing process simple and worry-free? If that really is the goal here, implementing ETFs that make canceling a Nexus One contract more expensive than the price of the unsubsidized device itself hardly seems a good way of going about it.

I’ve asked Google (GOOG) to explain the rationale behind its $350 equipment recovery fee and will update here if I’m given one.

UPDATE: This just in from Google:

Google provides a subsidy for devices purchased with T-Mobile USA service. If a consumer cancels service after 14 days, Google recoups this subsidy in the form of an equipment recovery fee. After 120 days, the equipment recovery fee will no longer apply. This is standard practice for third party resellers of T-Mobile and other operators, and you will find similar policies for other mobile service resellers.

The T-Mobile early termination fee is separate and handled by T-Mobile.

This morning, EMC raised its offer for Data Domain to $2.1 billion from $1.8 billion, an 11 percent increase over its previous all-cash bid. Data Domain’s board had previously recommended that shareholders reject EMC’s $30-a-share cash bid in favor of a $30 cash-and-stock offer from NetApp (NTAP).

Hard to see the board doing so again now that the EMC (EMC) has sweetened the financial end of its proposal and removed some deal-protection provisions with which Data Domain (DDUP) had taken issue. With those gone, EMC’s bid is clearly superior to NetApp’s, CEO Joe Tucci claims, and it would be hard to argue otherwise.

“Over the past several weeks we’ve received strong support from many Data Domain stockholders and customers, validating our belief that EMC is Data Domain’s best choice,” Tucci wrote in a letter to Data Domain’s leadership. “With regulatory requirements now fulfilled, and in light of the clearly superior proposal we submitted to Data Domain’s Board of Directors today, we expect Data Domain to sign our definitive agreement that will deliver superior value in cash to the Data Domain stockholders in as little as two weeks.”

Data Domain has until midnight on July 17 to accept the offer.

UPDATE: NetApp responded to EMC’s announcement with the following statement:

“In response to EMC’s revised, unsolicited offer, the NetApp Board of Directors will carefully weigh its options, keeping in mind both its fiduciary duty to its stockholders and its disciplined acquisition strategy. We will provide an update shortly.”

This morning, EMC raised its offer for Data Domain to $2.1 billion from $1.8 billion, an 11 percent increase over its previous all-cash bid. Data Domain’s board had previously recommended that shareholders reject EMC’s $30-a-share cash bid in favor of a $30 cash-and-stock offer from NetApp (NTAP).

Hard to see the board doing so again now that the EMC (EMC) has sweetened the financial end of its proposal and removed some deal-protection provisions with which Data Domain (DDUP) had taken issue. With those gone, EMC’s bid is clearly superior to NetApp’s, CEO Joe Tucci claims, and it would be hard to argue otherwise.

“Over the past several weeks we’ve received strong support from many Data Domain stockholders and customers, validating our belief that EMC is Data Domain’s best choice,” Tucci wrote in a letter to Data Domain’s leadership. “With regulatory requirements now fulfilled, and in light of the clearly superior proposal we submitted to Data Domain’s Board of Directors today, we expect Data Domain to sign our definitive agreement that will deliver superior value in cash to the Data Domain stockholders in as little as two weeks.”

Data Domain has until midnight on July 17 to accept the offer.

UPDATE: NetApp responded to EMC’s announcement with the following statement:

“In response to EMC’s revised, unsolicited offer, the NetApp Board of Directors will carefully weigh its options, keeping in mind both its fiduciary duty to its stockholders and its disciplined acquisition strategy. We will provide an update shortly.”

On Monday the company once again said its bid for the data storage equipment maker Data Domain is “superior” to a competing offer from NetApp. This, despite the fact that Data Domain earlier in the day issued a statement recommending that shareholders reject EMC’s $30-a-share cash bid and instead accept a $30 cash-and-stock offer from NetApp.

“Our Board is committed to enhancing stockholder value and, after careful review with our outside advisors, determined that the $30 per share EMC Offer is not in the best interests of our stockholders at this time,” said Frank Slootman, president and CEO of Data Domain.

Why not? Well, among other things Data Domain hasn’t been able to discuss EMC’s offer because EMC hasn’t yet accepted the confidentiality and standstill agreement that would allow it to do so. For another, Data Domain must pay a $57 million termination fee if it should abandon its deal with NetApp–and that’s on top of a host of other considerable transaction expenses.

That’s understandable, I suppose. Still, it’s difficult to see why Data Domain insists that EMC’s all-cash offer is worth less than NetApp’s cash-and-paper bid. Unless it’s doing so to force EMC’s hand deeper into its wallet. And, indeed, that may be exactly what’s happening here. Sources say. EMC (EMC) could raise its offer to as much as $35 per share to win Data Domain (DDUP) or force NetApp (NTAP) to pay more than it can afford for it. “EMC is in the win-win box and NetApp is in the lose-lose box,” a source close to the company told Reuters. “EMC can pay more than NetApp can in a reasonable range. If NetApp wants to pay at an unreasonable range, that’s good for EMC.”