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S&P Does Not Like the Google-Motorola Deal – WHY? I Like the Deal!
 8/18/2011 edit
By PJLouis
Tags: S&P, Google, Motorola, wireless, handset, Carl Icahn, Android, iPhone, Apple

http://www.wirelessweek.com/News/2011/08/Standard-and-Poors-Google-Shares-Motorola-Deal-Business/?et_cid=1959551&et_rid=259458880&linkid=http%3a%2f%2fwww.wirelessweek.com%2fNews%2f2011%2f08%2fStandard-and-Poors-Google-Shares-Motorola-Deal-Business%2f

http://www.wirelessweek.com/Articles/2011/08/Google-really-want-to-challenge-Apple/?et_cid=1953995&et_rid=259458880&linkid=http%3a%2f%2fwww.wirelessweek.com%2fArticles%2f2011%2f08%2fGoogle-really-want-to-challenge-Apple%2f

I love S&P’s comment about selling Google’s shares because of the Motorola deal. Why is the Google deal bad?

Doesn’t this deal give Google access to technology? The problem with the software business is the barrier to entry is lower than the hardware business’ barrier to entry.

My question to S&P is what is Google’s business?  I have been asking that question for the last 4 or 5 years.

Is it Carl Icahn’s fault? Well he might have something to do with the sale. However, at least Motorola did not do what was suggested last year: sell off the patent portfolio and not the company. At least Motorola in its entirety is being sold off. Motorola shareholders are making money and the company continues on.  A technology company without its core patents is a candidate for liquidation.  Of course the brokers who would have made a fortune selling off the patents will disgaree.

Google has been trying to find a way to grow and evolve its business for the last several years. Heck, I have even said I had no clue what Google wanted to be when it grew up.

If the S&P does not like the deal, the question I have for the S&P is: What do you think Google is or ought to be? Bear in mind, a business has to look to the future if it expects to be around for years.  Business models cannot be static.

How will Google’s growth, margins, and balance sheet suffer?

When I heard the news that Google was buying Motorola, I thought the deal gave Motorola new life (preserved the company and jobs) and gave Google a platform to build its business.

The Android platform is a solid platform; it just needs a catalyst to unify the multitude of Android platform interpretations.

I believe that Google’s acquisition of Motorola is good for Motorola and is good for Google.

Why is it good for Motorola? Well, they now have cash and a big customer.

Why is it good for Google? Well, they now have a technology company that knows wireless. Well, now they have the means to stabilize and unify the Android community.

Can other OEMs be threatened by the Google-Motorola combination? Maybe, but frankly, Motorola is going to have to compete with these OEMs for the carriers’ business, regardless of who owns it.  Other OEMs have nothing to worry about.

Google is not a carrier. Buying a manufacturer and technology company like Motorola does not make Google a carrier. Buying Motorola does not mean Google will outsell other OEMs.  Google has to sell to carriers because it is not a carrier.  Buying a manufacturer and technology company like Motorola does not admit Google to the carrier club.

Has everyone forgotten that Sprint, AT&T, and Verizon are not intimidated by vendors? Motorola will get no special treatment from the carriers.

 
So, now that we have Google making OS and Handset,  Apple making OS and Handset,  when will Microsoft go all in and buy Nokia?  

Will Samsung drop Android and focus on Bada  URL link(operating_system)

What will HTC do?
gdt gdt
8/18/2011 edit 
Well, Stephen Elop is from Microsoft so maybe Nokia will be purchased by Microsoft.  However, I think Microsoft and Nokia will have a hard time merging their corporate cultures.  

As for Samsung dropping Android, I doubt it.  I also don't see a problem with Samsung promoting Bada.

HTC will promote Android and continue its lawsuits against Apple.

We need to keep in mind that this is all software, which by the way is much easier to manage than hardware.

Does this sound like the Wild West?  You bet it does. This also reminds me of the way things were when cellular was coming into its own 20 years ago.  Eventually the market will decide what vendor will win.  Vendors and carriers will try to influence what platform will win but in the end the consumer will decide the winner.
PJLouis PJLouis
8/18/2011 edit
 
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