Google Makes Gargantuan Grab for Motorola

MMI buyout a clear show of smartphone intentions

    View All  
Google Makes Gargantuan Grab for Motorola

With well more than $35 billion in cash on hand, Google had been on the prowl to find its own version of the iPhone. This summer it made a move for wireless parents from now-defunct telecom Nortel Networks but lost out in the bidding war for the rights. With that opportunity missed, Google wasn’t willing to wait any longer — and spent about a third of its total cash on this massive Motorola deal.

Of course, the really expensive question consumers and investors alike are asking right now is “Can Google pull this off?” On paper, the move seems like a remarkable opportunity. Google clearly has made its mark with the Android software for mobile devices. It currently is the most widely installed in the world, by one report appearing on 43.4% of all new smartphones sold in the second quarter of 2011 and in another totaling about 48% of global market share. And Motorola is one of the biggest smartphone brands — not just in the U.S., but also in markets like China, where growth is red-hot in the mobile market.

Of course, there are big risks here, too. Although Google has been making big strides in recent years with its Android software, its in-house handset known as the Nexus One flopped in 2010. And let’s not forget that Apple, the reigning king of mobile, likely will be making a huge splash this fall with the release of its iPhone 5. Oh, and those pesky Windows Phone and BlackBerry devices still are hanging around — not to mention the innovative products being created in some twenty-something’s basement that we haven’t heard of yet.

The tech marketplace is constantly evolving, so it’s impossible to predict what will come next. But one thing is certain: Google’s big bid for Motorola shows it is not content with its spot in the food chain and will do whatever it takes to recreate the iPhone’s level of smartphone success.

Jeff Reeves is the editor of InvestorPlace.com. As of this writing, he did not own a position in any of the stocks named here. Follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.


Article printed from InvestorPlace Media, http://investorplace.com/2011/08/google-motorola-buyout-goog-mmi/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.