Google, Motorola Deal: Mobile Innovation, Investment, and Opportunity
By: Jason Llorenz, Esq.
September 14, 2011
Google, the search engine leader is not slowing, even after it recently found itself under investigation by regulators seeking insight into its search practices. Google recently announced its aim to venture further beyond what it has accomplished in cyberspace with its $12.5 billion deal to buy Motorola’s cellphone business. The move has brought up a great many question as to how the deal will reshape the mobile world, Google’s culture and, from our perspective, Latinos and their use of mobile technology.
For the everyday Jose, the purchase is exciting and intriguing –it combines Google’s modern ingenuity with Motorola’s stalwart engineering expertise and inventiveness, to compete in the cut-throat mobile hardware space. New meets older, meets tough challenges – compelling stuff.
The story beneath the surface is the less exciting narrative of the sad state of the present patent system and the dizzyingly complicated Intellectual Property litigation landscape. The real story that may benefit Latino, and other mobile consumers is that Google’s purchase of Motorola Mobility gives it the needed commodity of the manufacturer’s patent portfolio – valued not for the sake of its content alone, but as a shield to protect the company from lawsuits from others such as LG, RIM, Samsung, Apple. Fewer lawsuits mean better prices for consumers.
Competition is already fierce in the smartphone and tablet market, and the purchase enhances the position of Google’s Android-based mobile system by tightly integrating hardware and software. According to Information Week, “Android’s mobile phone market share [is] at 43.4% vs. 18.2% for Apple’s is, and that Google’s year-over-year share gain was 26.2%, vs. 4.1% for is. In other words, there is not only an all-out war to win at mobile, but winning in mobile propels companies to untold value.”
For Google’s partners, there are questions as to whether Motorola will become the preferred vendor, allowing the merged company to gain greater market share by virtue of proximity. Google contends that this won’t be an issue.
“Our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices,” said Andy Rubin, Google’s senior VP of mobile, in a statement.
The deal for Google comes at a whopping 63% premium at $40 per share in cash. In exchange for its $12.5 billion, Google gets Motorola’s patents, a huge chunk of engineering brainpower and almost 20,000 additional employees — doubling the Internet company’s work force, though it remains to be seen how much impact Google will have on Motorola’s workforce since they have indicated the company will continue to operate as its own entity, within Google.
Still, growth creates new expectations for Google as an employer and corporate citizen, whose policies for supplier diversity, hiring and retaining diverse talent will be under the microscope of a national community of leaders seeking to ensure Google meets its responsibilities to a Latino community leading in the purchase and use of the mobile platform – much like the companies that appear on the Hispanic Business top companies list released this month.
Google’s innovation of new and exciting mobile services to be driven from this deal is likely to continue the beneficial growth of the mobile platform for Latinos – a platform that continues to drive jobs, communication and connection to the mobile world, especially when the wire-line broadband adoption divide continues as a stark challenge. More and better mobile devices and services remain a key opportunity to connect Latinos, and serves as an important “on-ramp” to the Internet.
While the biggest acquisition in Google’s history still needs to be approved by regulators in the U.S and Europe, industry experts widely expect the deal to be approved.
Jason A. Llorenz, Esq. Is Executive Director of the Hispanic Technology and Telecommunications Partnership (HTTP).