Google buys Motorola – Smart move or desperation?

By • Aug 19th, 2011 • Category: Blog

Google has announced its intention to buy Motorola Mobility Holdings Inc. for $12.5 billion dollars, while setting a $2.5 billion dollar breakup fee if the acquisition does not pass antitrust scrutiny.

Google’s says the acquisition is driven by two factors: the collaboration of Motorola and Google to build a better Android eco-system, and Motorola’s patent portfolio that could be used to defend against lawsuits from rival companies Apple and Microsoft. However, we think the deal has less to do with Motorola’s patent portfolio and more with Google’s frustration at how long it’s taking to ramp up Android’s position in the market. Motorola’s patent portfolio isn’t strong enough to prevent litigation with Apple and Microsoft. Instead, it looks like Google is grooming Motorola to become its exclusive partner in pushing Android devices. It’s a move that reeks of desperation, because it doesn’t look well-planned. The biggest advantage of the Android OS is its open-source architecture that allows any mobile handset manufacturer to implement it into its own devices. If Motorola now becomes the privileged handset for Android, Google will lose most of its following with other handset manufacturers and this only weakens its market position in the long term.

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