Google’s risky deal: Benefits of snapping up Motorola Mobility not patently obvious

“Google is hoping to secure the long term future of its business — by turning that business on its head,” Rolfe Winkler and Martin Peers report for The Wall Street Journal. “With its proposed $12.5 billion acquisition of Motorola Mobility, Google is jumping into a lower-margin, cut-throat hardware business. Even for a company with as varied ambitions as Google, this is a risky deal.”

“Google’s willingness to buy Mobility highlights how much it needs to protect its Android mobile operating system, now caught up in a raging patent fight,” Winkler and Peers report. “Along with other Android-powered handset makers such as Samsung and HTC, Mobility has been sued for patent infringement by Apple and Microsoft.”

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Winkler and Peers report, “Google’s deep cash resources should strengthen Android’s legal defenses. Moreover, Google will inherit Mobility’s portfolio of 17,000 patents, a critical intellectual property weapon. But the risks are significant. Google’s ownership of Mobility could undermine what has been Android’s big advantage: namely, the support it gets from multiple handset makers… Even settling the patent lawsuits could be harder, argues patent expert Florian Mueller. Google may want to use Mobility’s patents to negotiate a settlement that covers all Android handset makers. For Apple and Microsoft, agreeing to an Android-wide settlement may be unpalatable.”

Much more in the full article here.
 

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Related articles:
Why Google’s purchase of Motorola Mobility is a white flag of surrender, and how Apple won the future of tech – August 15, 2011
Winners and losers in the Google-Motorola deal – August 15, 2011
Google’s Motorola move underlines Apple’s Android advantage – August 15, 2011
Google had to gobble up Motorola Mobility – and it could end up being a disaster – August 15, 2011
Google to buy Motorola Mobility for $12.5 billion to bolster patent portfolio – August 15, 2011

25 Comments

  1. It’s a good deal for Google, Motorola and the consumer alike.
    Android is going to take some heavy losses with the iPhone 5 and the Oracle Patent issue, so it needs to beef up it’s armor to survive.
    This is good for the industry the consumer and even Apple. Apple needs a healthy alternative platform so as not to draw the ire politically imposed regulation if it’s power and economy of scale is deemed to impede competition. This is a good thing for all involved.

  2. Palm with a huge bunch of patents and a modern OS (WebOS) AND Rubinstein failed so patents don’t guarantee success. Rim ain’t doing too good either.

    only reason Android did better than WebOS is because it’s free and (sort of) ‘open’ so every OEM in the far east was jumping on it. Now with Google directly competing with them OEMs are going to drop Android and it becomes another isolated WebOS i.e ‘fail’.

    (note I don’t believe Google can be ‘fair’ as it says as it HAS to give Moto preferential treatment. Without preferential treatment for Moto Samsung for example with it’s manufacturing cost advantage will bury Motorola. this ‘unfairness’ will eventually drive OEMs away.)

  3. Nikki Finke (deadline.com) reported that Motorola Mobility accounts for about half of all cable tv set-top boxes.

    So maybe Google will be taking on the AppleTV/AirPlay combo?

  4. One interesting thing I have not seen in the fury of commentaries about the moto acquisition is that for the first time apple and google will engage in direct lawsuits against each other. So far they danced around, keeping the appearances of cooperation despite competition. Now the gloves are off and we will see some claws.

  5. But let’s all remember that per Google, Intellectual Property rights are anti-competitive in nature, so they will be releasing those patents into the public domain, right??? 🙂

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