Google 'Power Move' Bets on Future of Mobile

Google executives see a great future in mobility, both for computing and for the company, and they're willing to pay a lot for the power they think that will bring them in the mobile market.

By Sharon Gaudin
Tue, August 16, 2011

Computerworld — Google executives see a great future in mobility, both for computing and for the company, and they're willing to pay a lot for the power they think that will bring them in the mobile market.

That's the thinking of several analysts after Monday's announcement that Google had made a deal to buy mobile phone and tablet maker Motorola (MOT) Mobility for about $12.5 billion. The hefty deal means Google will have a mobile hardware manufacturer in its arsenal that could give Google's Android operating system a massive boost.

It also could mean, however, that Google's hardware partners in the Android world may be feeling defensive.

"Google recognizes that Windows and the Mac provide Microsoft and Apple with substantial power and they want that power for themselves," said Rob Enderle, an analyst with the Enderle Group. He noted that Google is putting a lot of faith in the mobile market with this acquisition. "The trend is toward mobile devices and they want to own this trend."

Enderle also said he generally worries about merging companies of this size, especially when they've had a different business focus. But he has hope for this acquisition and said it may lead to many more. "Google seems to be on a path of providing a lot of stuff -- smartphones , tablets, PCs, TVs -- and that suggests both that there are other acquisitions in their future and that they will be putting massive price pressure into these markets over the next few years," Enderle said.

Google has shown that it understands the power of mobility, particularly when the company came out with the Android mobile operating system and turned a good portion of its attention toward the smartphone market.

Monday's move to buy Motorola only deepens the company's commitment to mobility.

"Google is definitely betting the future of Android with this acquisition," said Chris Hazelton, an analyst with the 451 Group. "It risks alienating other device vendors, and it is the large number of supporting device vendors that is driving the success of Android."

Dan Olds, an analyst with The Gabriel Consulting Group, said that while Motorola comes with a massive price tag, he doesn't see this as an especially risky move for Google.

"Google is betting on mobility with the Motorola purchase, but this isn't a bet-the-company type move," he added. "Although, it's a very big purchase, it's not that big when compared to Google's revenue or cash balance."

But won't this move anger some of Google's Android handset partners? Sure, Olds said, but it's worth it.

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