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After Google bought Motorola Mobility for $12.5 billion, we reached out to some people who went through Google’s last big merger – the one with DoubleClick, back in 2007 – for a little bit of insight into how this one might go.One source thinks Google will eventually spin out Motorola.
A slightly edited explanation:
What will drive the integration strategy is what they plan to do with the business: are they going to spin out the handset business? Keep it but run it arms-length and maintain a chinese wall between it and the software business? Fully integrate and compete head on with HTC and others?
Pre-DoubleClick and still with smaller, tech-driven deals, Google’s philosophy had been to handpick employees from target companies, and only retained a minority of the company.
With DoubleClick, the DoubleClick team argued that this didn’t make sense with 1,500+ employees, especially when those employees had thousands of living, breathing customers. So they agreed to bring on board most of the company but make some token reductions agreed through hiring committees comprised of people from both companies.
In this case, seems like they are going to have to take that several steps further and get comfortable with a stand alone business unit – something they don’t really have – that includes a lot of people (probably most of the company) they would never hire on their own. They then will need to carve out a lot of exceptions to their normal practices, like hiring, benefits, etc. It’s tough to see that, which would argue in favour (along with the strategic arguments) of spinning it off at some point.