Google's envy of Apple and its dominance of mobile phone market has seen the search engine company buy Motorola Mobility on Monday for the eye-watering sum of 12 billion dollars. This isn't just an intensification of the patent war that is taking place at the moment. This could be massive shift of emphasis for Google.
Google might have the top selling mobile phone operating system, but it's not enough for Google. They want what Apple has. Now that the dust has settled we look at the deal and ask the most important question: Is the Google-Motorola buyout a match made in heaven or hell for both companies?
Match Made in Heaven
Strike Whilst the Iron is Hot
Why would Google spend so much dough on this buyout? First, because its Android smartphone software has huge momentum and the company is looking to strike while the iron is hot. Second, because even if Google can’t leapfrog Apple to become the premier smartphone brand, it will make a heck of a lot more money by cutting out the middle man.
Google Chief Legal Officer David Drummond wrote a scathing blog post in which he said the companies were “banding together” to use “bogus patents” as a “weapon to stop” innovation, citing the numerous lawsuits against Android hardware manufacturers as evidence.
Motorola's Arsenal of 17,000 Patents and 7,500 Applications
So what does Motorola offer Google? Well one of the main attractions is the Motorola's arsenal of 17,000 patents and 7,500 applications. This would allow Google to protect itself and it's partners against further legal wrangling. Not only will it bolster its patent library but also it will give Google, Motorola's technology expertise. This could mean that Motorola can safeguard its 20,000 strong workforce.
For Google to jump into the phone hardware business would be a huge departure for Google. Previous acquisitions – from Internet video pioneer YouTube to travel-software company ITA Software – have avoided hardware. It also would undercut Google's strategy of broad partnerships that has led Android to the top.
Google’s TV Dream Gets Closer
As part of the deal, Google will also acquire the settop box and cable equipment operations of Motorola Mobility, one of two dominant suppliers of settop boxes and equipment to the U.S. pay TV industry. Could this pave the way for Google to be a major player in the TV industry with it’s hardware and Youtube ?
The acquisition also highlights the growing importance of web and mobile players in the TV industry, and in some sense might be considered the first big deal of the tablet revolution that is transforming the way viewers access and watch TV programming.
Match Made In Hell
Problems with Motorola Patents
First and foremost, Motorola's 17000+ patents are not filed just within this decade. Many of them are old day patents which are of no value today. It is not how many patents you actually have. It’s all about the value of those patents something that has been called into question of technology experts when evaluating the Google/Motorola deal.
Could Alienate Google Partners, HTC, Samsung and LG
While Google insisting it will continue to partner with other phone makers, and Motorola will have to compete to get first crack at the latest software as it does today. The fear is that this deal could alienate companies like HTC, Samsung and LG as they might see that previous level playing field has been distorted with the acquisition of Motorola by Google.
Push Microsoft to Partner with Nokia
The acquisition of Motorola by Google could increase the pressure on Microsoft to acquire a hardware company rather than just partnering with Nokia. With RIM and Nokia struggling with holes in their portfolios and the stock prices under severe pressure over the past year, it isn’t beyond the realms of possibility these two companies could be the most obvious acquisition targets for Microsoft.
Deal or No Deal?
Not yet. The Google-Motorola acquisition still has to go through all the usual rounds of regulatory approval, both in the U.S. and abroad. Google and Motorola Mobility aren’t anticipating a long road. The two companies say they expect the deal to be closed by the end of this year or early next year.
Heaven or Hell?
A lot of this remains up in the air but there are major changes happening in the mobile phone industry and companies are coming together on both sides of a patent war. Who will win is unclear. But Google’s purchase of Motorola is a massive statement of intent. It’s looks as if the mobile phone war is going to be between Apple, Google and Microsoft. Where this leaves companies like RIM and Nokia is unclear but don’t be surprised if they are picked up as part of the this patent proliferation.
What do you think? Do you think the Google-Motorola Marriage is a match made in Heaven or Hell? Let us know in our Facebook poll here!