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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

August 15, 2011 at 10:24 AM

Roundup: Pundits pouncing on Google-Moto deal

Here’s a look at some of the ways pundits are dissecting Google’s bodacious $12.5 billion bid for Motorola Mobility.

Regulators will be all over this deal, wrote Arik Hesseldahl at All Things D:

“Whatever happens, it’s going to take Google some time to get this deal done, and if it does get approved, you can expect some significant regulatory concessions.”

Motorola Mobility gives Google a deterrent for its nuclear patent war with Microsoft, Apple and others, wrote Tim Bradshaw at the Financial Times:

Patent battles are a little like nuclear war: for there to be peace, each side must have armaments equally assuring mutual destruction.

Motorola has more than 17,000 active patents, dating back to the earliest mobile-phone technology, and another 7,500 going through the mill.

Google may have just acquired an instant nuclear deterrent – and that’s something that the companies who have come to rely on Android may welcome in spite of the new tension the deal creates.

Google’s wasting $12 billion on weak patents, Andrew Orlowski at The Register wrote (headline: “Has Google wasted $12bn on a dud patent poker chip?):

“These radio and design patents of legacy manufacturers such as Motorola or Nokia really aren’t worth quite as much as their owners think they are.

Google has paid $12.5bn for a negotiating chip that appears to be almost impossible to redeem. In this light, the acquisition looks like panic, rather than a calm and carefully deliberated strategy.”

The deal’s not about patents as much as Google’s evolving business model – and other phone companies should be scared, wrote Florian Mueller at Foss Patents:

It would be a mistake to look at this as just (or primarily) a patent deal. We’re looking at a deal that would fundamentally change Google’s Android-related business model … The likes of Samsung, HTC and LG obviously don’t have any other choice than to say at this point that they welcome the deal. They will continue to say that for some time. They obviously weren’t going to bash the deal in public. But there’s no way that they can compete with a Google-owned Motorola Mobility on a level playing field.

Google TV will be a huge beneficiary, since the deal gives Google the leading set-top box maker, Ryan Lawler and Ryan Kim wrote at GigaOm’s NewTeeVee blog:

Until now, most set-top boxes have run proprietary operating systems. As a result, offering up Google TV as the underlying OS could simplify and accelerate the rollout of new applications on cable systems, which could improve the overall user experience on the set-top box. And by pitching Google TV as the underlying OS for Motorola set-top boxes sold to TV operators, it could very quickly create a large install base for developers to build applications for.

The one question is how open that set-top box will remain if Google shifts from a consumer- to a carrier-based model for Google TV.

Even Google’s Larry Page weighed in on his company blog:

The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences. I am confident that these great experiences will create huge value for shareholders.

I look forward to welcoming Motorolans to our family of Googlers.

But the deal could be a debacle for Page, thrusting him into “a crappy, low-margin commodity business,” wrote Henry Blodget at Business Insider:

Google deserves credit for a big, bold move.

But let’s be real: This deal could end up being a disaster.

How?

Well, for starters, the deal creates major channel conflict: Google is now competing with its partners. And hardware manufacturing is an entirely different kind of business than Google’s core business. And hardware manufacturing is a crappy, low-margin commodity business. And Motorola is massive–Google has just increased the size of its company by 60%. And the deal appears to be purely a defensive move, not an offensive one. And so on.

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Comments | Topics: Android, Google, google tv

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