The Social Analyst is a column by Mashable Editor-at-Large Ben Parr, where he digs into social media trends and how they are affecting companies in the space. You can follow Ben on Twitter and Google+.
Love or hate Larry Page and his decisions, you have to say this about Google’s new CEO: he isn’t scared to roll the dice.
That’s exactly what Page did when Google announced its acquisition of Motorola for $12.5 billion. With that money, Google acquired 24,500 patents, 19,000 employees and a hardware business that is losing money. With an acquisition this big, there are only two outcomes: victory or defeat.
For Google, the Motorola acquisition is a series of gambles. Google is gambling that regulators will approve the deal. It’s gambling that Motorola’s patents will be enough to force a stalemate in the Google-Apple-Microsoft patent wars. And finally, it’s gambling that it has the capability to create the software and hardware for a phone that can truly rival the iPhone.
If most of Larry Page’s gambles pay off, then the $12.5 billion price tag will seem cheap compared to the billions they could print making high-end hardware. If Page’s gambles fall flat, then the company’s stock will tank and investors will be calling for his head.
And you thought playing craps in Las Vegas was nerve-wracking.
Let’s take a look at the gambles Larry Page and his company are making, and what each successive gamble means for one of the world’s largest technology companies.
Gamble #1: Regulators Will Approve the Deal
Before Google can do anything with Motorola, it has to first convince regulators that the deal isn’t anti-competitive. It won’t be easy: Google is already the target of an FTC antitrust investigation. And this is, by far, the biggest deal in the search giant’s history.
Google has a couple of things going for it, though. It smartly secured the support of its Android partners. LG, HTC, Samsung and Sony Ericsson have all come out in favor of the deal because it will help Google “defend Android and its partners.” The truth is that they probably don’t like the Motorola deal, but are willing to swallow it because Android is the best option they have.
Google can also point to a need to control the hardware and software process of creating phones, thanks to the success of Apple and iOS. Apple’s complete control of the software and hardware process helped make it the world’s most valuable company.
If Google’s gamble fails, it will have to pay Motorola a $2.5 billion breakup fee. That is a huge number that shows Google’s commitment to the deal, but also shows that there is a huge risk that regulators will grind the deal to a halt.
My gut says that Page will win on this gamble, but regulators will force a lot of conditions on the deal.
Gamble #2: Motorola’s Patents Will Protect Android
If Google can get the green light from regulators, it will turn its attention toward putting its new patents to good use.
Here’s my bet: once Motorola is safely in Google’s hands, it will quickly bring Microsoft, Apple, Oracle and its other technology competitors to the table to broker a series of patent settlements unlike anything the industry has ever seen. Google will have enough patents to rival Microsoft and overshadow Apple’s smaller patent library. It could be enough to convince all sides to call a truce, which would be the ideal endgame for Google.
Of course, Motorola’s vast patent library wasn’t enough to scare away Apple when Motorola sued Apple. Motorola is also in an ugly patent battle with Microsoft. It’s anybody’s guess how the other tech giants will react.
If Google can’t broker a truce, expect it to bring out the big guns and sue its competitors into oblivion. The patent war is one that Google cannot afford to lose. Larry Page is a wartime CEO, and he will not let Google get steamrolled because it didn’t fight back.
Gamble #3: Google Can Design and Build a Better Phone
If Google can use Motorola’s patents to end the patent war, the $12.5 billion will be money well spent. But Motorola’s business is mobile hardware, and don’t think that Google doesn’t appreciate the hardware assets it could soon obtain.
A lot of people seem to think Google will spin off Motorola’s hardware business. I don’t agree, and here’s why: I believe Larry Page relishes the challenge of dethroning the king of technology, Steve Jobs.
Jobs was able to create a software and hardware company that works with near-perfect harmony. Jobs was able to create a business with high-end products and enviable profit margins. Jobs was able to create the world’s most valuable technology company.
Larry Page is confident, hyper competitive, brilliant and a visionary who isn’t afraid to make big bets nobody else is willing to make. In other words, he thinks he can accomplish what Jobs accomplished. That’s why he’s not about to cede the lucrative smartphone and tablet market to Apple.
It all boils down to this: with control over both the hardware and the software, Google is betting that it can design a phone that can truly compete with the iPhone. It would be the first true Google phone. If the search giant can create a device that is considered an equal to the iPhone, it will hit Apple where it hurts and potentially reap big financial rewards. Failure will forever tarnish Google’s reputation and cement Apple’s position as the technology company of the future.
Larry Page has put a lot of chips on the table. Google’s stock price will determine whether it was a smart gamble.
Lead image via Flickr, Alexcreative
More About: apple, Column, Google, larry page, microsoft, Motorola, The Social AnalystFor more Business & Marketing coverage:Follow Mashable Business & Marketing on TwitterBecome a Fan on FacebookSubscribe to the Business & Marketing channelDownload our free apps for Android, Mac, iPhone and iPad
Posted on Wed, 17 Aug 2011 02:53:37 +0000 at http://feeds.mashable.com/~r/Mashable/~3/GmWDTdKPYaM/
Comments: http://mashable.com/2011/08/16/the-larry-page-gamble/#comments
Love or hate Larry Page and his decisions, you have to say this about Google’s new CEO: he isn’t scared to roll the dice.
That’s exactly what Page did when Google announced its acquisition of Motorola for $12.5 billion. With that money, Google acquired 24,500 patents, 19,000 employees and a hardware business that is losing money. With an acquisition this big, there are only two outcomes: victory or defeat.
For Google, the Motorola acquisition is a series of gambles. Google is gambling that regulators will approve the deal. It’s gambling that Motorola’s patents will be enough to force a stalemate in the Google-Apple-Microsoft patent wars. And finally, it’s gambling that it has the capability to create the software and hardware for a phone that can truly rival the iPhone.
If most of Larry Page’s gambles pay off, then the $12.5 billion price tag will seem cheap compared to the billions they could print making high-end hardware. If Page’s gambles fall flat, then the company’s stock will tank and investors will be calling for his head.
And you thought playing craps in Las Vegas was nerve-wracking.
Let’s take a look at the gambles Larry Page and his company are making, and what each successive gamble means for one of the world’s largest technology companies.
Gamble #1: Regulators Will Approve the Deal
Before Google can do anything with Motorola, it has to first convince regulators that the deal isn’t anti-competitive. It won’t be easy: Google is already the target of an FTC antitrust investigation. And this is, by far, the biggest deal in the search giant’s history.
Google has a couple of things going for it, though. It smartly secured the support of its Android partners. LG, HTC, Samsung and Sony Ericsson have all come out in favor of the deal because it will help Google “defend Android and its partners.” The truth is that they probably don’t like the Motorola deal, but are willing to swallow it because Android is the best option they have.
Google can also point to a need to control the hardware and software process of creating phones, thanks to the success of Apple and iOS. Apple’s complete control of the software and hardware process helped make it the world’s most valuable company.
If Google’s gamble fails, it will have to pay Motorola a $2.5 billion breakup fee. That is a huge number that shows Google’s commitment to the deal, but also shows that there is a huge risk that regulators will grind the deal to a halt.
My gut says that Page will win on this gamble, but regulators will force a lot of conditions on the deal.
Gamble #2: Motorola’s Patents Will Protect Android
If Google can get the green light from regulators, it will turn its attention toward putting its new patents to good use.
Here’s my bet: once Motorola is safely in Google’s hands, it will quickly bring Microsoft, Apple, Oracle and its other technology competitors to the table to broker a series of patent settlements unlike anything the industry has ever seen. Google will have enough patents to rival Microsoft and overshadow Apple’s smaller patent library. It could be enough to convince all sides to call a truce, which would be the ideal endgame for Google.
Of course, Motorola’s vast patent library wasn’t enough to scare away Apple when Motorola sued Apple. Motorola is also in an ugly patent battle with Microsoft. It’s anybody’s guess how the other tech giants will react.
If Google can’t broker a truce, expect it to bring out the big guns and sue its competitors into oblivion. The patent war is one that Google cannot afford to lose. Larry Page is a wartime CEO, and he will not let Google get steamrolled because it didn’t fight back.
Gamble #3: Google Can Design and Build a Better Phone
If Google can use Motorola’s patents to end the patent war, the $12.5 billion will be money well spent. But Motorola’s business is mobile hardware, and don’t think that Google doesn’t appreciate the hardware assets it could soon obtain.
A lot of people seem to think Google will spin off Motorola’s hardware business. I don’t agree, and here’s why: I believe Larry Page relishes the challenge of dethroning the king of technology, Steve Jobs.
Jobs was able to create a software and hardware company that works with near-perfect harmony. Jobs was able to create a business with high-end products and enviable profit margins. Jobs was able to create the world’s most valuable technology company.
Larry Page is confident, hyper competitive, brilliant and a visionary who isn’t afraid to make big bets nobody else is willing to make. In other words, he thinks he can accomplish what Jobs accomplished. That’s why he’s not about to cede the lucrative smartphone and tablet market to Apple.
It all boils down to this: with control over both the hardware and the software, Google is betting that it can design a phone that can truly compete with the iPhone. It would be the first true Google phone. If the search giant can create a device that is considered an equal to the iPhone, it will hit Apple where it hurts and potentially reap big financial rewards. Failure will forever tarnish Google’s reputation and cement Apple’s position as the technology company of the future.
Larry Page has put a lot of chips on the table. Google’s stock price will determine whether it was a smart gamble.
Lead image via Flickr, Alexcreative
More About: apple, Column, Google, larry page, microsoft, Motorola, The Social AnalystFor more Business & Marketing coverage:Follow Mashable Business & Marketing on TwitterBecome a Fan on FacebookSubscribe to the Business & Marketing channelDownload our free apps for Android, Mac, iPhone and iPad
Posted on Wed, 17 Aug 2011 02:53:37 +0000 at http://feeds.mashable.com/~r/Mashable/~3/GmWDTdKPYaM/
Comments: http://mashable.com/2011/08/16/the-larry-page-gamble/#comments
