Computer Support Blog

Big business transactions happen every day in the tech sector.  As more and more technology companies buy out their competition or diversify to stay relevant in a changing marketplace, it is sometimes tough to understand what specific transactions might actually mean.  Lately, there has been a lot of speculation that Google will pay $12.5 billion to buy Motorola Mobility.  This transaction has created a lot of buzz in both the tech sector and the business world.  There are several factors that make Google’s purchase of Motorola Mobility an atypical buyout.

First, Google purchasing Motorola represents a financially strong company (Google) buying a significantly weaker company.  Motorola Mobility’s market share has been steadily declining in recent years and it has been operating at a loss.  Why would Google buy a company in that condition?  One argument is that Motorola Mobility’s decline has been, in part, because the company cannot afford the research and development needed to produce hip, new smartphones.  The cash infusion from Google would be an investment; Google would be paying Motorola Mobility to make entire new lines of smartphones that would, theoretically, be profitable and make Google its money back.  Google would also continue its dominance with its Android platform by loading Android and other Google apps into all of its Motorola phones.

Second, for the first time, Google would be buying a company that produces a physical product.  Google has not had to deal with the realities of manufacturing and all of the factors – supply chain, labor considerations, and environmental regulations – that come with buying a company that makes a product.  The prevailing wisdom is that this purchase signifies an important development in the corporate culture of Google.  By purchasing Motorola Mobility, Google would be illustrating a firm commitment to be involved in all levels of the tech sector, from search to social networking to mobile computing technologies.  The creativity of Google combined with hardware production is a very exciting possibility for consumers.

What will the buyout of Motorola Mobility by Google mean to you?  If the buyout happens and Google is successful at marketing new Motorola phones, it will help Google maintain its mobile search dominance.  By having a guaranteed outlet for mobile phones loaded with Android and Google search functions, consumers will have an instantly-recognizable operating system.  That boosts confidence and ensures that apps will continue to be written for the Android OS.  It also increases the likelihood that Google will create a viable alternative to Apple’s iPhone.

Will Android collapse if Google does not buy Motorola Mobility?  Absolutely not.  But with the number of companies altering Android when they put it on their devices, Google has the opportunity to both create new physical products and make Android exciting again by buying Motorola!

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