Google Slams the Nokia + Microsoft deal, then buys Motorola Mobility?
Sadly WebOS/HP is no more…</small/.
In a surprising about face, Google, who not long ago slammed the Nokia and Microsoft deal, goes ahead to buy Motorola Mobility a spinoff company (setup in January 2011) that focuses on mobile devices such as Smartphones and tablets.
In Internet time, this is old news by now.
I’ve taken my time to write this post, simply because I wanted to read what the different financial analysts or technology critics had to say about the pros and cons of this deal. The general sentiment if you like. Most of them shot it down, and Google stock took a beating. Standard and Poor (S&P) even downgraded their rating of Google stocks to sell and lowers the price target to $200 from $500.
Let’s get this straight. This deal is no good for investors. Simply because it goes against the traditional corporate thinking of cash is king, play to your strengths, play to win, and companies acquired should compliment and add value to the company. If the deal is none of the above, it is going to hurt in the short term.
But this deal is vital for Android’s survival as a business unit, and perhaps even to Google’s long term success as a company on a whole.
I’ve always said we need to build or design ecosystems not just products (software or hardware). Google buying Motorola is really this idea personified. There is no hardware without the software, and no software without the hardware. Case in point, the amazing successes of iPhone/iOS and Nintendo Wii.
So indeed it was ironic that they slammed the Nokia and Microsoft deal. Perhaps they had hoped that Nokia could have been Android’s close hardware partner instead of Microsoft. It would have been a lot cheaper! But it was not meant to be, so Google went out to buy a partner instead.
Indeed conventional wisdom is correct to advise companies to play to their strengths, but the world of innovation and design is changing. Companies cannot afford to ignore the big picture experience, and say things like, “Oh, I’m not good at software, so lets outsource it to an expert and let them deal with it”.
Well, I’m just going to sit back and watch how awesome our mobile lives is going to become.
From the direction Android is heading, and now with Motorola on board, I think we might finally see a credible competitor to Apple’s iPhone dominance in the Smartphone market. So I’m bullish, especially since Google is great at acquiring companies and making the different cultures work.