code & rock

Boom! Not to steal Steve Jobs’ catchphrase but that does sum up how I felt when I came back after lunch to launch Google reader and see 10 articles stating Google just spent a whopping 12.5 billion to acquire Motorola Mobility. Motorola Mobility is the phone hardware division of Motorola. Essentially it is what everyone thinks of when you say Motorola.

To put this deal into perspective the last major deal that Google made was to acquire DoubleClick in 2007 and that was for the grand sum of 3.1 billion. That deal turned out to be excellent value for Google. DoubleClick ad exchange eventually became Google ad manager and allowed Google a massive leap up into the display advertising game. It’s interesting that Microsoft was also interested in DoubleClick back then and they were reportedly interested in at least acquiring Motorola’s patents. Burned twice by Google in two very large acquisition attempts.

The question everyone is scrambling to answer is will the Motorola deal be as big or bigger success as DoubleClick or fall flat on it’s face.

Here’s my take on what the deal’s about.

Protecting Android

Mobile is the future. Google saw the trends many years ago and so smartly invested in a mobile platform, and by invested I of course mean bought another company who were developing a mobile OS that has become Android.  They have played the mobile game pretty well over the intervening years against Apple, Microsoft and RIM.

As of mid July 2011 Google have said they are activating 550,000 Android devices everyday. That’s a lot of devices, more than half a million every single day and they say it is growing at a pace of 4.4% every week.

The point I am getting to is that Android has become a massive success in a market Google must be part of if it is to continue to be relevant and competitive in the coming years.

So what do you think Google thought when companies suddenly took notice of this success and came knocking on the door with patents they say Android infringes on? Do they not take it seriously and hope it gets sorted in the courts over many years or do they take offensive defensive action?

Well they went on the offensive to protect Android and all of it’s partners that use it or have bet their companies on it.

By purchasing Motorola Mobility Google obtained roughly 17,000 extra patents with which it can use to fight off Apple, Microsoft and Oracle among others. Before this Google only had about 1,000 patents.

The reaction from partners has been interesting. They have all come out in support of the acquisition as it offers them more protection. It will be interesting to see if their sentiment is genuine or if it’s mere public fronting while they plan behind the scenes. I think it’s genuine. I think Google won’t risk pissing off all it’s partners by relegating them all to a second tier below Motorola.

HW + SW integration

The title sort of says it all. Here’s the thing when I was previously upgrading my phone about a year and a half ago I decided to still go for the iPhone. I had many reasons why I decided to stick with Apple last time among them (though not the largest) was the quality of the iPhone 4 and Apples tight integration of iOS with it. HW/SW integration is a valid point. I don’t think it’s the be all and end all of success in the market but I do believe it is a factor, at the very least for a segment of the market.

If Google decide to keep the HW division of Motorola then they will be able to say to consumers here’s a piece of HW that will work superbly with Android and btw there’s we haven’t loaded it up with any extra crapware that will suck up your battery and slow down your phone.

I think this can only be a benefit to consumers and a positive effect on the market as a whole.

Larry page shining through as war time CEO

Lastly I think this purchase is a good guide of how Larry Page will be as the new CEO of Google. It appears that he will not shy away from being aggressive. He won’t be afraid of making big bets and fighting to make them pay off.

To me this is a big consideration especially moving forward. Goggle is up for the fight with Larry Page at the wheel.

richard@richardjohnashe.com