Ten Questions About Google Buying Motorola

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Apple buying T-Mobile. Microsoft buying Adobe. We’re all used to reading stuff by tech pundits talking about seismic, world-changing acquisitions in a somewhat fanciful manner. But Google buying Motorola Mobility, the recently-spun-off part of Motorola that makes phones and other consumer hardware, is real–and the most potentially world-changing acquisition in many years. (Compared to this, HP buying Palm was positively humdrum.) If I’d been drinking anything when I read the headline this morning, I would have done a spit-take.

It’s not that it’s a completely unthinkable merger–in fact, it’s existed as a rumor for quite a while. It just seemed really unlikely, until it happened.

(MORE: Google to Acquire Motorola Mobility)

Mergers that are supposed to change everything have a lousy track record of changing everything–sometimes, they don’t change anything at all, at least for the better. (They also don’t have a perfect track record of actually happening: we should be careful about assuming this is a done deal until it is.) Right now, I’m still processing the news and asking myself questions.

Such as…

Will Googlemoto make fantastic phones?

We all know the story: Apple benefits enormously from being one of the few tech companies which, in Steve Jobs’ words, makes the whole widget–the hardware, the software, the services. The smoothness of the iPhone experience compared to that of Android phones shows that it’s a good idea. Now Google will be trying a similar approach. Motorola already makes very good Android phones, but not ones which are radically better than those from other companies such as HTC and Samsung.

(MORE: Why Competing with Apple Is So Difficult)

Will being owned by Google help Motorola make phones that more seamlessly blend hardware, software, and service than other Android handsets to date? I’m not sure. But I’ll bet that HTC and Samsung hope not! (Google’s stance seems to be that Motorola will be a self-contained unit, which might argue against deep integration–but it may be saying that for political reasons as much as anything else.)

Speaking of HTC and Samsung, how do other companies which make Android devices feel about this?

Can you imagine any scenario under which they’d greet it as wonderful news? They’ll now be competing against the company that makes their operating system. It’s as if Microsoft bought Dell. Even if Google bent over backwards to maintain a level playing field, you’d have to be the Pollyanna of all Pollyannas to think that the Android device company that was part of Google wouldn’t have a huge advantage. You can practically feel the clenching of teeth in the Android partners’ supportive quotes.

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So will any Android device companies dump Android, or at least de-emphasize it?

Betcha that they’re all assessing their options right now–and that some of them are looking at Windows Phone, the most significant mobile operating system that won’t be owned by a hardware company, in a new light.

How does Apple feel about this?

Can you believe that it was only two years ago that Eric Schmidt was on Apple’s board? This makes Google into Apple’s archrival in a way it never was before. Google will now make phones and tablets, and you’ve got to think that there will be Android-powered TV boxes and other devices that compete with various parts of the Apple empire. This is the most important rivalry in consumer technology, by far.

(MORE: How Google TV Can Be Saved)

Does this have any impact on Android patent lawsuits?

Well, sure: Google will own Motorola’s giant trove of mobile patents. Suing Google or Android licensees should be less tempting if Google controls patents that would let it sue you right back. I’m not sure about how it affects lawsuits in progress, such as Oracle’s one against Google and Apple’s one against HTC, but here are some early thoughts from FOSS Patents’ Florian Mueller.

Will it inspire more humongous acquisitions?

There will certainly be more deals inspired by a need to snap up patents for offensive and defensive purposes. But hmmm…will there be anything on the level of, say, Microsoft actually buying Nokia? I hope so–it would be fun to write about.

What does this mean for the problem that dare not speak its name, Android fragmentation?

It could mean more fragmentation for Android phones that aren’t made by Motorola, if companies such as HTC and Samsung decide that the best way to compete with Google’s own devices is to add differentiation through additional layers of software. (I hope they don’t go that direction, but that’s just me.) With any luck, though, the Motorola product line will eventually look like the Nexus S writ large–a bunch of phones that offer unadulterated, immediately-updated Android. The mere act of doing that would go a meaningful way towards catching up with the simplicity of the iPhone. article continues on next page…

Other than the implications for the phone business, what’s interesting here?

To date, nobody’s managed to build a hugely appealing Android tablet. Now Google will get to try its hand at doing so itself. And how about Google TV? It’s been a flop so far, but Motorola makes DVRs and set-top boxes and sells them to TV system operators–giving Google the opportunity to reboot Google TV and try again with a new business model. (Here are some thoughts on that topicfrom Gigaom’s Ryan Lawler and Ryan Kim.)

What’s the nightmare scenario?

Google acts like it bought a patent portfolio that came with a handset maker, and–either willfully or through neglect, and either quickly or slowly–drives Motorola’s handset business into the ground. That would be really depressing. But Google’s press release mentions both the future of Motorola devices and patent protection as arguments in favor of the deal. And they are indeed both really important, which is why I think of this as, um, an offdensive move.

Any final thoughts?

Not final final ones–I’m sure I’ll have a lot more to say about this. But here’s a final thought for now. For decades, we “all knew” that Microsoft’s business model of licensing software to third-party hardware makers was superior to Apple’s philosophy of doing as much as possible itself, at least when it came to the potential for absurd profits. (Here’s one of at least ten zillion articles based on that premise.) But Apple seems to be doing just fine with its strategy. Companies like HP are mimicking it. And now Google is spending $12.5 billion to take a stab at the Apple way, without quite giving up the Microsoft way. (Its decision to both make its own devices and license its software to other companies is most reminiscent of the approach that Palm took for a few years; it didn’t work out well long-termin that case.) Microsoft is still making boatloads of cash, too, but can we all agree that it’s no longer so clear that everyone knows it figured out the best business model for software and Apple blew it?

This article originally appeared on Technologizer…

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