Google Faces Challenge Bringing Tired Motorola Brand to Life

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Set top boxes
hms022001   8/17/2011 1:56:48 PM

The patents are the focal point of the purchase, but you are correct Mitch the set top boxes gives Google TV a huge asset and leverage. 

Mitch Wagner
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Apparently, that's what Henry Blodget says: Google buying Motorola will be a disaster comparable to AOL buying Time-Warner. 

There are only two things that Motorola has that Google could want: The patents, and the set-top boxes. 

And not the boxes themselves -- the market share, to use as a weapon against the ISPs who might seek to throttle Google's access to consumers. 

Everything else, including the design of the set-top boxes themselves, are products that Google could make on its own. 

Mitch Wagner
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Like buying a frat house.
Mitch Wagner   8/16/2011 8:25:18 PM

One blogger noted that one of the first things Larry Page did as CEO this year was to try to refocus the company, killing a bunch of projects that were distracting from core business without adding value. The "Wonder Wheel" and Google Labs, two name two. 

This blogger went on to say that Google buying Motorola, a failing hardware vendor, and nearly doubling its payroll, is like announcing you're going to clean house and instead going out and buying a frat house. And keeping both. 

(I can't remember which blogger said that and I'm too lazy to look it up.)

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Ryck   8/16/2011 5:20:19 PM

Ellis, I just don't think that Google wants to be in the hardware business.  I like Mitch's idea that they strip out the patents for themselves, and let the handset business operate on its own or close it down.

Even if they keep Motorola operating, it can still work.  There are many examples of companies competing and cooperating (coopetition).  Provided that Google let's the partners know what the rules of engagement are, this could work.  Also, what is the option for HTC and Samsung, for example?  Will they move to the Microsoft platform?

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HTC vs Apple
hms022001   8/16/2011 1:06:19 PM

Add to the list of patent suits;,2817,2391192,00.asp


Mitch Wagner
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Wouldn't it be wild?
Mitch Wagner   8/16/2011 12:56:05 PM

Wouldn't it be wild if Google simply grabbed the patents from this deal, and then spun out the rest of Motorola Mobility into its own separate company? Or even just shut MM down if it couldn't find a buyer?

A couple of interesting analyses of the deal. Daring Firebal's John Gruber:

I think Motorola knew they had Google by the balls. Google needed Motorola's patent library to defend Android as a whole, Motorola knew it, and they made Google pay and pay handsomely. I don't think it's curious at all why Google didn't simply license Motorola's patents. Motorola held out for a full acquisition at a premium far above the company's actual value, and threatened to go after its sibling Android partners if Google didn't acquiesce. Thus the public threats from Jha and Icahn. Thus the high price. Thus the lack of a simpler, cheaper licensing agreement. Thus the unusual $2.5 billion reverse breakup fee.


I think Apple and Microsoft probably feel pretty good, competitively, about having forced Google into spending $12.5 billion for Motorola - a handset maker with rapidly declining sales, no recent profits, and misguided management.

Also, Motorola is the top vendor of cable modems. That gives Google great clout in its net neutrality fight with ISPs. 

Ellis Booker
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Ellis Booker   8/16/2011 10:24:14 AM

Entirely agree that Google's primary motivation was defense re: patent challenges. That said, consumers don't care about this--at all. They just want great products that work. The worry, I think, is that Google will cross lines with its in-house Android licensee (Motorola Mobility--or whatever it comes to be known as) and that this will fracture the touted Android "ecosystem" with OEMs like Samsung and HTC (to name just two of my favorites).  

That would be a shame, in my opinion, because I've never liked Apple's business model, which calls for a stranglehold on hardware. It would be a shame to see Google/Motorola head down this path, although that's certainly a possibility. 

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hms022001   8/16/2011 10:16:46 AM

Google’s main target is to acquire the patent library.  This gives Google ammo to combat the list of litigators regarding patent infringement.  But with Android devices projected to account for over 50% of the market Google understands the device sales potential, and will optimize Motorola's product line.  Yes the relationship with HTC, Samsung, Sony, etc. will get frayed but that will allow those companies to create Windows 7 phones.   In the long term the consumer wins in this deal

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Ryck   8/16/2011 10:10:59 AM

Ellis, I think you're looking at the Motorola acquisition from the wrong angle.  I don't think Google has any desire to be a hardware manufacdturer.  In fact, I believe, like many others, that this acquisition was primarily to gain access to Motorola's treasure chest of patents, which is approaching 21,000 when you include those pending.  The Android competitors have been clever in not directly pursuing Google for patent infringement.  Instead, they have targeted the handset manufacturers leveraging Android, such as Samsung and HTC.  The patent portfolio Motorola provides Google will allow them to combat these threats, and hopefully result in some cross-licensing agreements.

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