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Posted at 01:55 PM ET, 08/15/2011

Why the Google - Motorola deal makes sense...and why it doesn’t


Chairman and CEO of Motorola Mobility Sanjay Jha speaks during a press event at the 2011 International Consumer Electronics Show in January. Google has agreed to acquire Motorola Mobility for nearly $12.5 billion by early 2012. (Ethan Miller - GETTY IMAGES)
Google and Motorola Mobility announced they’re joining forces in a $12.5 billion deal that could have a whole lot of impact on the tech industry. Apart from patent issues we addressed earlier, here are some things to consider about the deal and why it does (and doesn’t) make sense:

Google enters hardware: Google doesn’t foresee any sort of regulation trouble on the horizon regarding this particular deal, because it’s a vertical acquisition. Google isn’t currently a player in the manufacturer game, so this deal probably won’t trigger too many alarm bells at the Federal Trade Commission over what it’s doing in the mobile space.

In some ways, the company is catching up — Apple does its own hardware and software, HP has WebOS through its Palm acquisition, and Microsoft is quite cozy with Nokia.

That said, Arik Hesseldahl wrote at All Things Digital that it’s possible that Microsoft will make some noise about the acquisition, given its public spat with Google over patents and its ongoing rivalry between Bing and Google.

Android’s open...right?: Okay, but what if you’re Samsung, HTC or LG? The manufacturers may be saying — even if it is in a somewhat cookie-cutter fashion — that they’re happy about the acquisition, but there has got to be some anxiety on their part that Motorola will now be Google’s favored company.

Google CEO Larry Page and mobile lead Andy Rubin both said multiple times during the conference call announcing the deal that they are committed to Android’s open platform, and that it wouldn’t make sense to restrict it to just one manufacturer.

The acquisition also raises questions about what exactly is going to happen to the Nexus line, Google’s only foray into manufacturing. HTC and Samsung have both taken a crack at making the phone to house the bleeding-edge of Android innovation for Google. Will Motorola now get preferential treatment?

Competing with Apple: Cupertino looms over this deal like some sort of brushed-aluminum specter, as this is a clear move to set up an all-out mobile war between iOS and Android.

It’s easy to see this move as an attempt to curb the fragmentation of the Android platform and give Google a firmer hold over its open-source superstar. Will that help it compete with Apple?

It really depends on how the Android really shakes out post-acquisition, but if Google does end up stepping on the toes of partners such as Samsung and HTC, it may encourage them to jump to Microsoft.

It’s obviously too early to tell, but investors don’t seem so sure about Android’s chances— Google is down in trading today, while Apple continues to grow with the rest of tech stocks.

Google TV: Motorola is a leading set-top box manufacturer, meaning that this acquisition could spell good things for getting Google TV into more living rooms across the country.

In this morning’s conference call, Page and Motorola CEO Sanjay Jha said that they hope this partnership will spur further innovation when it comes to set-top boxes. With Motorola’s network of cable contacts, Google’s got a real opportunity to expand in this area.

Related stories:

More technology coverage from The Post

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GALLERY: Click the image above to view the gallery.

By  |  01:55 PM ET, 08/15/2011

Tags:  Google, Mobile

 
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