Why search giant Google is buying Motorola
For all its claims to transparency, the world of Internet media is so layered with mystery that figuring out something as straightforward as a big corporate takeover, where strategies are usually clear, is like trying to break a code written in an obscure foreign language.
Case in point is the Google-Motorola deal.
Google, the reigning online colossus, is buying Motorola Mobility, the legendary consumer electronics company that now makes mobile phones and TV set-top boxes. At $12.5 billion, it’s a sizable purchase, even for a lushly cash-rich company like Google, which has $39 billion in its sock drawer.
It will double Google’s workforce. But what’s impressive isn’t the size of the deal. It’s the purpose behind it, which seems, at first glance, inscrutable. Google, after all, makes its money from search.
Mainly, it auctions off search words to corporate clients that want to advertise alongside the responses Google delivers to online queries related to things they peddle. It’s a sweet business. Google made $3 billion last quarter on revenue of $9 billion.
Motorola Mobility, on the other hand, sells handsets and is the No. 2 provider — after Cisco — of the set-top boxes that cable operators rent to subscribers to carry TV channels into their homes.
So, what does one thing have to do with the other? Why is an extravagantly successful service company, the darling of Internet users worldwide, buying into the hardware business, where competition is fierce and margins are low? Why does a search-based behemoth want to spend billions on cell phones and cable boxes?
There are several answers, which together provide a glimpse of the swirling changes in the new media economy, and some disquieting clues as to how some of the world’s most advanced companies make money from you.
• Key to the story is Android, Google’s operating system for mobile devices. While Apple Inc.’s iPhones and iPads are pop icons, Google’s Android has overtaken Apple and Nokia in worldwide smart-phone sales and is used by 39 manufacturers, including Samsung, LG Electronics and Sony Ericcson, as well as Motorola. They get Android for free.
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Both studies found that those who use social media on their mobile phones tend to also use calls, texting and data more often as well. They are also more likely to buy additional wireless services in the future and are more likely to give positive
While Apple Inc.'s iPhones and iPads are pop icons, Google's Android has overtaken Apple and Nokia in worldwide smart-phone sales and is used by 39 manufacturers, including Samsung, LG Electronics and Sony Ericcson, as well as Motorola.
As for power management, what VMware has seen in working with LG and Samsung is that the power management penalty of Horizon Mobile is "less than 1 percent," he says. While Horizon Mobile only delivers the VM to Samsung and LG phones running Android,
Motorola is said to have an Android watch phone in the works. Both LG and Samsung have created watch phones with LG offering its version as recently as 2009. In terms of sales, previous connected watches have been duds. Innovative as it was, LG's watch
The study finds that 234 million Americans ages 13 and older used mobile devices for the three month average period ending in July. Samsung led the category of OEMs with 25.5 percent of US mobile subscribers (up 1.0 percentage points), followed by LG
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