Google’s Acquisition Puts it in New Arena

Google Moves Boldly Into New ‘Construction’ Role

I once sat with Jack Kent Cooke, the late owner of the Washington Redskins football team and Los Angeles Lakers basketball team—and New York’s Chrysler Building—as he told me how he acquired the rights to own the expansion Los Angeles Kings hockey team. In his gravelly and boisterous voice, he shouted, “They [the opposing group] told me, ‘You can’t own this team; you don’t have anywhere for them to play.’ [The Lakers were a tenant in another arena at the time. I believe the new group had obtained the hockey rights for that arena.] I told them, ‘We’ll see about that!’ and I built the [“Fabulous”] Forum.” And he was indeed awarded the team.

This story came to mind this morning as I was reviewing the information around Google’s $12.5 billion purchase to acquire Motorola Mobility Holdings and its 17,000-plus patents—allowing it to enter the business of making cellphones and tablets. I was reading the Official Google Blog post from Larry Page, Google’s chief executive, announcing the deal.

“Given Android’s phenomenal success, we are always looking for new ways to supercharge the Android ecosystem,” Page wrote. “That is why I am so excited today to announce that we have agreed to acquire Motorola.”

But it was further down the post that got me thinking. “We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android,” Page wrote. That sentence included a link to an August 4 post by David Drummond, Google’s senior vice president and chief legal officer that ended with this quote: “Our competitors are waging a patent war on Android and working together to keep us from getting patents that would help balance the scales.”

Basically, Page and Drummond have just built their “Forum”—minus all those nasty construction headaches. So the move shouldn’t come as that much of a surprise. “Computing is moving onto mobile,” Page had previously said in a New York Times interview. “Even if I have a computer next to me, I’ll still be on my mobile device.”

More analysis comes from today’s New York Times: “‘For Google, it’s important for them to make sure that the mobile space is not dominated by one company, that being Apple,’ said Steve Weinstein, an analyst at Pacific Crest Securities. By acquiring Motorola, he said, they ‘can drive down costs and create a product that is pioneering with Google services around it.’”

Apparently, the deal should go through because Google would be getting into a new business rather than increasing its share in one it already controls. Phones running Google’s Android system accounted for 43.4% of smartphones sold in the second quarter, according to Gartner research. But Google has apparently been sensitive to customer complaints that the phones are too complicated “because Google works with 39 phone makers that use different versions of Android across their platforms, resulting in variable performances.” (That is according to Richard Doherty, research director for Envisioneering Group, a market research and consulting firm.) Apple, however, controls both its device and software—a model Google apparently covets.

One concern analysts have is that Android would no longer be an open platform, but Page addressed that on his blog post. “This acquisition will not change our commitment to run Android as an open platform,” he wrote. “Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.”

Page signed off by writing that “the combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences…I look forward to welcoming Motorolans to our family of Googlers.”

Interesting that he needed that quirky last sentence. Like Cooke—who at one time held the Guinness record for largest divorce settlement (Judge Wapner of People’s Court fame presided over that ruling while serving on the Los Angeles County Superior Court)—Page has bravado. He just expresses it in different ways.


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