Google wasted no time in finalizing its $12.5 billion purchase of handset maker Motorola Mobility in the wake of Chinese regulatory approval. Just one day after China okayed the deal, the online advertising giant announced that it has purchased Motorola Mobility.
“I’m excited to announce that our Motorola Mobility deal has closed,” Google CEO Larry Page wrote in a post to the Official Google Blog. “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. And as a company who made a big, early bet on Android, Motorola has become an incredibly valuable partner to Google.”
Page also revealed that former Google executive Dennis Woodside will take the reins as the new CEO Motorola Mobility. He replaces Motorola’s Sanjay Jha and is assembling his new executive team for the handset maker. Woodside has already promised to reduce the number of devices that Motorola makes—it introduced 20 smartphones last year alone—but there is a bigger question mark around Motorola’s workforce, which at almost 20,000 employees is widely considered too big.
As for Google, the online giant is entering an interesting new era for its Android partnerships. To date, Google has had various relationships with the hardware partners that make Android-based devices of all kinds. But as the owner of Motorola Mobility, Google will awkwardly be competing with the same companies it has partnered with. And some might fear that Motorola will get preferential treatment and perhaps earlier access to new Android technologies. Google claims there will be a “firewall” internally that will prevent these issues.
Some have also speculated that Google would use Motorola Mobility to push its Android-based Google TV initiative since Motorola already manufactures TV set-top boxes. There’s been no official word on this development, however, and so far Google TV has proven to be an expensive flop.
More important, I think, is whether Motorola can jumpstart sales of Android-based tablets. So far, Android has dominated the smartphone market, but the system has proven far less successful in the tablet market. One has to think that a major tablet push is part of the plan as well.