Google is sitting on piles of cash. Some reports put it at $40BB dollars. I suppose that could burn a hole in your pocket. So Google is going to spend $12BB to buy Motorola’s old phone division.
This is a strange play. Google is the king of search and is doing really innovative things in all types of software development. Android is threatening the iPhone in almost exactly the same way the Windows took on Macintosh. Windows was the less elegant solution than Apple, but it was open to any type of application imaginable without the approval from Redmond. There were so many different PC manufacturerrs that the consumer had great choices. Prices went down, adoption went up and Microsoft won.
What if Bill Gates had tried to buy the PC division of IBM? The story would have turned out very differently. Thousands of other businesses that were part of the PC explosion would have suffered. The success of so many Silicon Valley entrepreneurs was because of that ecosystem.
What are HTC and Samsung going to do? License Googles software but compete against their hardware? This is not a trivial question and the impact on thousands of startups in the mobility space are going to be impacted by this.
So why is Google doing this? Probably because of the Facebook phone. It is a battle with Zuckerburg.