Photo: Flickr/Esther Dyson
Google just altered the mobile landscape with its decision to pay $12.5 billion for Motorola.Who wins and who loses in this new world? Read on to find out …
Google just paid $12.5 billion for a patent portfolio. Sound like a good deal? Not really. But it also gets a handset maker. So that makes it a good deal, right? Well, this is a low margin business with 19,000 employees and factories around the world. Not exactly the same thing as search and advertising. Is this what Google wants to do?
Nokia's stock popped in reaction to the news. We don't think Microsoft has to buy Nokia as a reactionary move, but we do think this will strengthen their bond. Of course ... Microsoft could buy it as a defensive move. The two companies are tied together. If Windows Phone does well on Nokia, Microsoft should enjoy the upside.
Apple comes out of this transaction in decent shape. You could argue that it will have a hard fight on its hands in the long run as Motorola works on more Android devices. However, we don't believe Google or Motorola have built any exceptional devices and nothing's going to change that.
We're calling Apple a winner because it forced Google to take this risky $12.5 billion bet.
No matter what Google says, Motorola is going to get favourable treatment with Android in the future. This has to infuriate Samsung, and HTC, two of its biggest Android partners to date. Unfortunately for them, there's aren't a lot of options out there. They could work with Microsoft, but it's committed to Nokia, and it's not like Windows Phone is lighting the world up.
RIM's stock popped when investors heard about Google buying Motorola. We're not sure how long that pop can last. There isn't a logical buyer out there for RIM. In the long term, RIM is a loser, no matter what, and this deal doesn't change anything.
Microsoft's rival is spending $12.5 billion to enter a business it doesn't understand. That should be a big win, right? Well, maybe. If A. Google does great things with the hardware, it's going to be bad for Microsoft, and B. Google did this because mobile software is not a good business, then it's also bad for Microsoft which is trying to figure out how to survive in the mobile software business.
Buddy Media, which is a Facebook marketing company, just announced it raised $54 million at a $500 million valuation. It probably thought it was going to have the morning news cycle to itself. Oops!