Google’s Rights… and Wrongs

Interesting news this morning as Google buys Motorola Mobility. This announcement follows a typical pattern: the news hits and all the news outlets report the information in the press release. Then the CEO does a conference call and everyone reports “the hidden agenda” beneath the conference call. And then the pundits arrive and espouse their philosophy about why the deal was good or why the deal was bad without having a clue what the intention is for the acquisition and how the acquirer will execute. The beauty is that 50% will be right and 50% will be wrong so each pundit has a pretty good chance of being “correct”. And by “correct” I mean they predicted success or failure correctly. Few ever get the details right.

So begins the inevitable wave of stories about how Google got it right or got it wrong:

– Google got it right because they needed patent protection against Microsoft and Apple. Motorola has a lot of patents and was relatively weak player that Google could pick off easily.

– Google got it wrong because 1/3 of your cash reserves was too much to spend on Motorola’s patent portfolio and the rest of the company, minus maybe UI/Design, you are going to kill off anyway.

– Google got it right because mobile phone markets derive profits for vertically integrated companies, not horizontal ones. This market is nothing like the PC market before it.

– Google got it wrong because they just bought a hardware company and took their horizontally focused company and made it vertical. This market, like the PC market before it, will win with platform plays.

– Google got it right because the financials are clear on these supposed partners. All of them, sans Samsung who has its own OS, are losing money and won’t be around long enough to help win 80% market share anyway and the rest — like Nook, supposed Kindle device and every manufacturer in China — are Android in name only, using the OS for its guts and ignoring the rest of Google’s guidelines.

– Google got it wrong because all these guys know how to do is imitate Microsoft. (And they didn’t even do it as well. Microsoft not only got a stronger brand in Nokia but didn’t even have to pay for it.)

– Google got it right because Samsung is going to ditch them anyway for Bada and, well, HTC is a whore who will make devices for anyone’s platform. How can Google rely on either of them?

– Google got it wrong because now they are imitating Palm! Are you guys crazy? Is it own both hardware and software or not?

– Google got it right because they can manage the delicate balance of owning hardware and manage an open software platform.

– Google got it wrong because they are an advertising company and ad companies want their ads to run everywhere. Owning hardware doesn’t get their ads more places. It restricts them to a single device line-up.

– Google got it right because they have missed the boat on managing the relationship with carriers. They are outside that relationship, leaving it to the hardware companies to control, and they aren’t getting the concessions Google expects.

– Google got it wrong because what the company needed was more ammunition for the US Federal Government and the EU to claim that Google is a monopolist who is using its dominant market position in search to buy up the mobile market.

I’m sure I missed a few but this should cover our bases. Which one do I think is the answer? Who knows. But it sure will be fun finding out!