What does Google want with Motorola? You.
Last Updated on Wednesday, 17 August 2011 21:30 Wednesday, 17 August 2011 21:24
Google is to shell out $12.5 billion to acquire Motorola Mobility Holdings Inc - a company older than Google itself and one which has been deeply involved in the development of mobile technology. The acquisition has been heralded as brave, dumb, maverick and aggressive by commentators speculating on the motives of Google CEO, Larry Page.
It could be as simple as patent wars.
Motorola holds nearly 17,000 patents (with another 7,500 pending patents - these guys probably have your kitchen sink patented). Apple, Microsoft and others have been accused by Google of driving up the licence fees on patents they hold in a bid to derail Google's move into the mobile market. Google simply doesn't have as many patents as them as it is rather newish to the scene. Hence, the acquisition of Motorola means Google can now trade punches with Apple et al by pushing up the price of licences for patents it owns. Patents are like ammo to these guys. If they can match the others, trench warfare ensues until a truce is called.
A $12.5 billion truce.
Which means in the longer run, its got to be about something bigger than patents. $12.5 billion is the largest deal Google has bitten off and far bigger than anything Microsoft or Apple have taken on. Motorola has been around mobile communications since, well, since mobile comms were invented. The purchase also brings Google into the physical side of things. To date, Google has kept its hands clean, designing software to run on devices and even designing devices, but never picking up a screwdriver to build an actual phone. That's all changed with this purchase. Google now gotta learn how to solder, screw, strap and build devices.
In the long run, Google is looking to its strategic plan that has helped it become one of the largest companies in the world;
Google Everywhere
Motorola's purchase gives Google a very large, giant foot in the world of mobile communications. It means that Google has a headstart on Microsoft and can now challenge Apple. Apple has roughly 19% of the mobile market. But Google's Android is installed on over 43% of mobile devices. If Google can capture that market and translate it into hardware sales, it could effectively increase its revenue at least the same as Apples.
Plus Motorola has already worked heavily with Google in the development of Google's Android software. Not only that, but Motorola Mobility makes set-top boxes (useful if GoogleTV is to get anywhere) and tablet computers (gPad anyone?).
Far into the future, Google is possibly eyeing up a world where the internet is multi-media in nature. That means that TV, radio, phone, fax (remember that?) and internet are all ... internet. There will be no such thing as 'calling' someone on your phone and facebooking them on your laptop while you watch brainless TV. All will be seamlessly integrated, much like the iPad is making strides towards. In that world, advertising on mobile communications isn't much of a stretch of the imagination. Rolling ads while you chat with friends, placing phone contacts into Google 'circles', targeted advertising based on the job occupation and interests of the people you ring most....it's all coming down the line.
Which means more of your privacy is chipped away, stored on Google servers and mined to build a complete profile of you for advertising. Oh, and it will be immensely handy for the State to know everything about you - what you've done in the past, where you currently are and what you are likely to do in the future.
The patents war is a strong and immediate motive for Google to buy Motorola Mobility. But the longer term goal of extending Google's influence into hardware and giving it control of products set to become as common as house keys is a strong rationale for moving on Motorola.
