Page: Motorola Mobility acquisition is key to Google's future

Page: Motorola Mobility acquisition is key to Google's future

Summary: Google announces completion of its deal to buy Motorola Mobility and enter the hardware market. The marriage will likely bolster Google’s Android-based smartphone business and Xoom tablet business but maybe not its OEM business. The extent of its success will also be determined by its support in the greater open source community, especially among open source developers, in the Software-as-a-Service era.

TOPICS: Mobility, CXO, Google

Google's CEO announced today that it has closed on its $12.5 billion purchase of Motorola and named former Americas chief Dennis Woodside to take the helm.

Anytime a company spends almost $13 billion for a company, it's news. And anytime Larry Page writes a blog, it's news. But today's announcement, made possible after Google finally cleared government scrutiny in the U.S. and China, is huge news. It is how Google aims to compete against Apple.

In his blog, Page predicts that mobile devices will replace desktop PCs, namely smartphones, including Motorola's hugely successsful Droid line, and tablets, where Motorola has failed to elevate Google's Android to the same stature. (Hence the buy)

See also: CNET: Google closes $12.5B deal | A daunting to-do list ahead | Google: We now own Motorola Mobility | Android tablet surge will be led by Google-Motorola, HP, Dell | The tablet revolution is coming

"We all remember Motorola’s StarTAC, which at the time seemed tiny and showed the real potential of these devices. And as a company who made a big, early bet on Android, Motorola has become an incredibly valuable partner to Google," Larry Page wrote today in an announcement. "It’s a well known fact that people tend to overestimate the impact technology will have in the short term, but underestimate its significance in the longer term. Many users coming online today may never use a desktop machine, and the impact of that transition will be profound--as will the ability to just tap and pay with your phone."

No one underestimates the importance of this buy to Google's future.

Google is now a hardware company. Its decision to marry its massive software business with hardware, a model championed by Apple and passed over by Microsoft, will have long term ramifications for the company and indeed the entire ecosystem around Android and Chrome.

Compared to Apple's iPad, Motorola's Xoom has been a market flop. Google's next, next generation Android tablet has to be much better.

The combined company has been making some improvements in the sales and marketing of the tablet, such as the "Ice Cream Sandwich" of Android now available on Motorola's Xoom, and devising a strong, comprehensive strategy that melds Google's Chrome and Android software (and enterprise applications) with Motorola Droid and Xoom lines. The $449 price cut on the Xoom also helped.

I am a longtime Droid owner and occasional iPad user who has longed for a viable Motorola tablet that can compete head on against Apple. I have hesitated on a tablet buy in part because I am awaiting a blockbuster next generation Xoom that runs a much better Android, in more elegant fashion, the way the iPad does. I want it to run Chrome well, enterprise apps well and to see some amazing innovations in the Google software space, due to the additional points of integration enabled by the marriage of Google's software with Motorola's mobile hardware.

I was also an early owner of Motorola's StarTAC. I like my Droid but continue to run into snags that sometimes require a phone reboot. That may have been acceptable in the early days of the PC but they're not in the mobile device era.

Becoming a smartphone and tablet manufacturer will have a huge impact on Google's OEM relationships, and probably not for the better.

I would argue that it's critical for Google to raise its stature in the open source side of the business. Getting developer buy-in for the next round of competition, in the cloud era, is huge. It appears the company is working harder to become a better citizen in this community. The Android code is back in the Linux kernel. Google continues to invest in leading open source projects such as Firefox. But the company has a ways to go to shed its proprietary image in the pure open source community.

Topics: Mobility, CXO, Google

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  • FOSS will fuel the growth

    of google for decades to come, while motorola's patents will deter the axes of evil software patent threat.
    The Linux Geek
  • With this deal...

    ... "open" just got quite a bit more closed. But isn't that what a lot of people have been saying it would take to bring some coherence to Android? Google also has to learn that when you build hardware, you have to provide real, honest-to-goodness service for it.
  • how about a new CEO

    "But the company has a ways to go to shed its proprietary image in the pure open source community."

    You can't be purely open and expect to compete in this fast moving cutting edge mobile business for several reasons. Open source is better over the long term, but google is walking the line as best they can. Imagine google making their top priority pleasing the open source community and hiring Richard Stallman as CEO. What do you think will happen? Google would be out of business next year.
    • There is no indication open source is better over the long term.

      None at all. Not saying it can't be successful but it does not seem the "better" in the long term.
  • Google and partnerships

    [i]Google continues to invest in leading open source projects such as Firefox.[/i]

    At one time, one could say that Google and Mozilla were partners. That was before Google's Chrome browser. Today, the money that Mozilla gets from Google is to make Google Search the default search engine on the Firefox browser. No more, no less. Google would like nothing more than to take over the Firefox browser market share and not have to pay Mozilla $$$ to make Google Search the default search engine.

    Also, remember that Apple and Google were once partners. Then Google acquired Android and got into the mobile OS business. Google's OEMs for Android included Motorola Mobility, Samsung, HTC, just to name a few.

    With Google's acquisition of Motorola Mobility, all I can say is watch out Samsung, HTC, LG, etc.

    And people say that Microsoft is hard on its partners?
    Rabid Howler Monkey
    • Being a partner of Google

      is alot likeeating poisoned fruit.

      Sure it feeds you now, though you know that in a very short time you'll be dead because of it.
      William Farrel
  • Meanwhile.....

    As their last lawsuit as Mot Mob, they lost a patent infringement ruling against Microsoft regarding ActiveSync.

    You wonder how Google is going to treat their hardware partners now that they have their own hardware. Will Google give preferential treatment to Mot Mob? Maybe give them specific hidden features that the others won't get or know. If so, Samsung and other Android makers could be scr?wed.
  • Google/Motorola Mobility, can be successful, if they put Windows 8

    into all their devices, and forget about Android, which, by comparison, will seem like the OS of the last millenium. Otherwise, Moto will fail.

    ;) :)
  • Regarding OEM relationships...

    Didn't anyone notice that Google expanded the Nexus program to 5 OEMs just days before the deal closed? That isn't a coincidence, OEM developers will be working out of Google's Mountain View office, in close collaboration with the Android team. So any stigma from this deal has already been taken care of.
    • OEMs are not fools

      They know Googles endgame is to commoditized the hardware by unifying the Android experience. This is good for Android and good for a google but bad for all OEMs in the long run.
      Initially the struggling OEMs will jump on board as they have nothing to lose but the big OEMs such as Samsung, HTC and LG are running scared....running to MS that is.
  • "Google is now a hardware company"

    You say that like thy [i]used[/i] to be a software company. What you call Google's "massive software business" is actually a massive [b]advertising sales[/b] business that uses software, and now hardware, to sell more, better-targetted ads.
    • +1

      Well said. Sadly, that is too often forgotten.
    • Google is now a bad hardware company

      Agreed, this acquisition looks like a bad idea.

      Google acquired a company which recorded losses in its net profits from 2009 to 2011, at the same time, the market of Android currently is dominated by two companies: Samsung and HTC, what makes us think that Motorola is going to sell more phones than Samsung?

      Google spent 13 billion dollars to acquire a company that is dedicated only
      making smartphones and tablets, Motorola does not manufacture televisions, computers desktop, laptops, or servers in the corporate hardware business.

      For me this acquisition is a mistake, because Google needs to give a
      real answer to Microsoft which will be releasing Windows 8 in Q3 2012,
      unlike Google's Android operating system, Windows 8 runs in many environments consumer market (computers all-in-one convertible) as well as ??the sector of business corporations (laptops for professionals, desktops, slates of business, workstations, etc)

      The future that awaits the Google company with this acquisition seems dark and this acquisition doesn't seem to be a threat to Microsoft or Apple.
      Gabriel Hernandez
    • Look at the bigger scenario

      Of course, if you would rather pay per search, then its all good! I have no particular affection for Google itself, but let's be realistic - the whole internet is funded by advertising revenue, so a little bit hypocritical to tar Google, just because they happen to make the best search engine and incidentally, the best "many other things" as well and hence have become the biggest player on the internet. Since even MS have abandoned the "open" model on their phones, we would all be on a stupified closed platform "smart" phone. If it wasn't for Google our current choices would be - Apple, WP7 and.... what?

      They ARE a software company and now, they will have access to their own hardware capacity as well.
  • Google needed a HW platform a long time ago.

    Nothin gonna stop em now.
    • Because they've had so much success with consumer devices so far.

      Google TV anyone?

      Granted, MMI knows how to make devices consumers will buy, but their problem was making a profit on them. Google knows how to make money, by selling advertising, but that doesn't mean a Google/MMI synergy will result in money-making devices.
  • Goodbye Moto Phone

    Since I truly despise Google and don't trust them as far as I could hurl an aircraft carrier, which BTW isn't to far, I guess I've bought my last Moto phone EVER!

    Goodbye Motorola, hello anything else. LG, Samsung, maybe even an Apple BUT sure as Hades no more Moto!!!!!!!!!!!! I refuse to support ANY company that "I" truly hate, despise and distrust.

    "That's my story and I'm a stickin to it!" Having said that I hope that ZDnet/ CNet isn't owned by Google or I'll be logging out NEVER to return!!!