It's official. Google has closed on its $12.5 billion acquisition of Motorola Mobility. But what does this mean for the merged company? There are still more questions than answers.
In a Tuesday morning blog post, Google CEO Larry Page opined about how the phones in our pockets have become supercomputers that are changing the way we live. He pointed out how it's now possible to do things we used to think were magic -- or only possible on Star Trek. Things like getting directions on the spot, watching a video on YouTube or taking a picture and sharing it instantly with friends all over the world.
"Motorola is a great American tech company that has driven the mobile revolution, with a track record of over 80 years of innovation, including the creation of the first cell phone," Page wrote. "We all remember Motorola's StarTAC, which at the time seemed tiny and showed the real potential of these devices. And as a company who made a big, early bet on Android , Motorola has become an incredibly valuable partner to Google."
Motorola Gets New CEO
Although Page didn't offer much insight on what Google will do with Motorola, he did announce that Sanjay Jha, who was responsible for building the company and placing that big bet on Android, has stepped down as CEO. Long-time Googler Dennis Woodside has taken the reins.
After extolling Woodside's virtues in the blog he turned his attention back to technology, indicating that Motorola would still make mobile phones, saying: "It's a well-known fact that people tend to overestimate the impact technology will have in the short term, but underestimate its significance in the longer term.
"Many users coming online today may never use a desktop machine, and the impact of that transition will be profound -- as will the ability to just tap and pay with your phone. That's why it's a great time to be in the mobile business, and why I'm confident Dennis and the team at Motorola will be creating the next generation of mobile devices that will improve lives for years to come."
Motorola's Ultimate Fate
We caught up with Avi Greengart, an analyst at Current Analysis, to get his take on what happens next with Google and Motorola. He told us he's watching to see if Google uses Motorola just for its copyrights and patents or runs it as a genuine business -- and, if the latter becomes the reality, whether or not Motorola can succeed as an independent business.
"Motorola certainly has Google's financial resources as a backstop. So losing money is no longer as dangerous to Motorola's immediate health," Greengart said. "You would expect that Google would not want to maintain a money-losing business, particularly when there are still concerns that owning a hardware business means you are competing with your licensees on Android."
As Greengart sees it, if Motorola starts seriously encroaching on the business of Samsung or HTC then that may actually be a negative for Google as a whole. On the flip side, if Motorola loses several hundred million dollars a year that's also a negative for Google.
"Motorola is going to be a storyline to watch going into this holiday season. At Google I/O next month we may see some indication of how Google intends to proceed with its Nexus program, whether everybody is allowed into that now," Greengart said. "So we could get some early indication as to what Google plans to do with Motorola as early as the last week of June."