Google-Motorola Deal a Win-Win?

By Erin Harrison August 17, 2011

The tech industry continues to speculate the potentially far-reaching implications from Google’s impending acquisition of Motorola Mobility.

Google Inc. announced on Aug. 15 that it has agreed to acquire hardware maker Motorola Mobility Holdings Inc. for about $12.5 billion, a premium of more than 60 percent to Motorola’s closing price of $24.47 on Friday.

Google officials have described the acquisition as a move to “supercharge” its Android ecosystem. Analysts are asking whether the acquisition is a good deal for Google, which already boasts more than 150 million Android activations – a number that grows about half a million every day, according to Newsfactor.com.

Others say the deal is a win-win for Google and Motorola, not to mention free markets and customers alike. Bruce Edward Walker, research fellow at The Heartland Institute, evaluated the deal as “worthwhile” for Google, according to the report.

“This may very well be a red-letter day for competition in the smartphone and tablet markets as Motorola Mobility will be better positioned in its duels against Apple, Nokia, Samsung and other industry competitors,” Walker told Newsfactor. “Google’s Android platform also may realize a technological boost by creating hardware-development strategies from the ground up. It’s a win-win for Motorola Mobility and Google, and a win-win for free markets and customers.”

Industry analysts are also quick to point out that with the Motorola acquisition, Google will pick up a much-needed patent portfolio, considering Motorola has 17,000 patents and 7,000 patents pending.

However, on Tuesday Standard & Poor’s downgraded Google stock in part over concerns that the biggest deal in Google’s history would take longer than expected to close, and that Motorola’s more than 17,000 patents would not adequately protect Google’s Android mobile software from a barrage of intellectual property challenges from such rivals as Apple (AAPL), Microsoft and Oracle.

In the Aug. 15 announcement, Google CEO Larry Page said the deal would “supercharge” the Android, benefiting consumers, partners and developers alike.

“Motorola Mobility’s total commitment to Android has created a natural fit for our two companies,” said Larry Page, CEO of Google, in a statement. “Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers.”

Meanwhile, industry analysts speculate that Google may be moving toward standardizing the Android user experience. Ultimately, the Google-Motorola deal will likely create stronger competition against Apple at the high end of the market.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.



Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Jennifer Russell

Executive Editor, Strategic Initiatives

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