Google and Motorola Mobility: it's not just the phones
Listening in to the Google/Motorola Mobility financial analyst call after the announcement of Google's takeover of the mobile phone pioneer, two things stood out.
The first, and the most obvious, was Google's desire to own Motorola's patent portfolio.
Google's currently sat on the sidelines of the current proxy patent war between Android manufacturers and a miffed Apple (with Steve jilted at the phone altar by Eric Schmidt), an angry Oracle (which really wants to find some way to pay for buying Sun, preferably from turning Java into a revenue stream), and a defensive Microsoft (watching all its one time partners turning to Android). Owning Motorola's patents changes the game for Google, painting a big target on Mountain View and putting it on the front lines of the war – something that may well force it to finally provide a patent indemnity for not just Android, but also for its WebM media codecs.
WebM is a big part of the other reason why Google bough Motorola Mobility, and it's that reason that Larry Page kept coming back to in the analyst call. It's the one massive advertising market Google hasn't yet conquered or disintermediated, one that counts for billions of dollars of revenue a year.
Television.
It's no secret that Google TV hasn't been the big success that Google predicted. That's partly down to the complexity of integrating a new platform with existing televisions, but mainly to the structure of the US TV market, which remains dominated by cable TV providers. Google needs to change that game, changing the way Google TV is sold to consumers and how it integrates with home entertainment systems, giving it the ability to sell advertising to a whole new audience.
And that's where Motorola Mobility comes in, as its cable set top box business dominates that market, even after Cisco's attempts to take over. Instead of Google TV boxes being yet another piece of consumer electronics, they're able to become the new IP-based operating system for Motorola's next-generation set top boxes. The shift to IP TV is happening, and Google wants in – and Motorola is its best chance of getting in that door.
If you're buying a cable TV box after Google and Motorola finalise their deal, you're going to get Google TV. It'll be the programme guide, and the application platform, turning the humble set top box into the hub of your home entertainment network. Proprietary app platforms on TVs will be hidden by the Google TV interface, and the slow to update TV hardware out evolved by software running on set top boxes. Is it any wonder that the prototype hardware Google's given developers that want to try out its next generation Google TV system look like, and have many of the same interfaces as a cable set top box?
And once Google's ironed out the bugs on set top boxes, it'll start replacing proprietary TV platforms with its own, rolling out Google TV to the free-to-air and satellite broadcast world with its machine-learning driven advertising engines already primed with the information from millions of cable TV boxes from all round the world. And with WebM at the heart of that platform, there'll be no need to pay licensing fees to MPEG-LA for all those TVs and for all those set top boxes.
After all, that's where the advertising money is: in the heart of the modern home, on the world's biggest entertainment platform, one that's not going to go away.
Billions and billions of dollars.
Who needs phones after all?
Simon Bisson