May 29 2012

Hello, Googorola: It's Game On for Google's Motorola Acquisition

After an 8-month courtship, Google closes its merger with Motorola Mobility.

Google has long stopped being just a search company. If we look back on the company’s trajectory, we could say it outgrew that label back when it acquired YouTube in 2006. Or maybe it was when the company decided to go into the office-productivity business with its Google Apps suite.

But all of those acquisitions were software-based moves that did little to change the web-focused vision of the company. The recent closing of its merger with Motorola Mobility, however, is set to transform Google into a hardware and software company. Which means it looks a lot more like Apple and Microsoft than, say, Yahoo.

The obvious motivations for the Motorola acquisition lie in the strategic advantages it affords Google in mobile. Mobile is the next frontier of computing, and with a war chest of more than 17,000 patents, Google is well-equipped to defend itself and its Android mobile operating system against the patent lawsuits that have become commonplace among mobile manufacturers.

Google CEO Larry Page named Dennis Woodside, former president of the company’s Americas region, as CEO of the company’s new subsidiary. This could be seen as a sign of bold ambition on the company’s part — especially with regard to hardware.

But Google will have to balance its hardware dreams with its open-source mobile OS, Android, which has gained traction in part because of its availability to all mobile device manufacturers.

N. Venkat Venkatraman, a Boston University professor specializing in technology and management, highlighted the dilemma perfectly in an AP story about the acquisition:

"This gives Google a chance to develop and showcase a 'next generation' device for mobile computing," said N. Venkat Venkatraman. "But it could also create a complex issue for Google. How do you balance the desire to create something that consumers love without upsetting the rest of the Android ecosystem?"

Our very own James Gaskin made the prediction that, with Motorola under its roof, Google could make a direct play for the iPhone:

But in two years, Google could be the iPhone’s biggest competitor. Yep, Google could take on Apple directly — they’ll have their own OS and their own hardware, piles of patents and plenty of cash (even after the $12.5 billion Motorola Mobility purchase). If you ever wondered if Android could leapfrog Apple’s iPhone design and “it” factor, just wait. The Android phone market may be a mess in the near future, but by 2014, there could be some amazing new phones with a “G” on the back.

With the acquisition officially closed, we won’t have to bother with speculation and predictions for much longer. Now, it’s time for Google to play ball.