Google Motorola

Google purchasing Motorola Mobility for $12.5b, Microsoft partnering with Nokia. Not to mention Apple and Novell and Nortell. It's a battleground and for good reason. The question is, in light of S&P's downgrading of Google stock to 'Sell', was this latest acquisition part of a farsighted strategic plan, or was it simply panic buying?

The acquisition has proved polemic so here's a round up of trending arguments from the web:

It's all about patents.

The mobile industry is fraught with patent battles (see post on mobile litigation) and this is Google's way of securing more patents to its arsenal, thus protecting itself from further lawsuits. With this acquisition Google picks up three times as many patents as AppleSoft got from Novell and Nortell. Some argue that they had been in talks for a while, therefore Google's attempts to pay through the roof for Nortel patents, was in fact a way of driving up the price for its rivals, eventually paid by Apple.

That said, some claim whilst this is about patents, these are the wrong patents to be acquiring. Motorola's patents lie largely with radio engineering and design, and the most vital radio patents are already covered by existing patent pools.

Getting a foothold in TV.

At first glance this would look like a an acquisition centred around wireless devices, however, look deeper and glimmering in the distance is Motorola's set-top box business. According to ZDNet there are two players in this field, Cisco and Motorola Mobility, which is the leader. Therefore, Google will benefit from significant relationships with the cable providers, cementing Androids foothold in what is likely to be the next battleground.

Hardware & Software.

Apple's hard/software business model is an attractive one: better profit margins, steals market share and evidently delights customers. It also makes rolling up software updates much easier which is better for all. Currently Google's hardware vendors add their own mark to the Android software which makes their OS upgrades trickier, if not slower. Given Androids entry into the Tablet market too, this would certainly allow for a much smoother rollout.

The risk here is a hardware strategy totally goes against the Android model, Google is to its core a cloud computing company. And therefore this is not an endorsement of the Steve Jobs doctrine 'the best way to make software is to control the hardware that runs it'. The impact of the manufacturing business could therefore prove an unwelcome distraction and AOL's Saul Hansell believes they'll spin off the manufacturing business within the decade.

And so the jury is really out on this one. What we can be sure is that Job's affirmation that their acquisition will increase Google's patent portfolio, is not the reason alone. I suspect he has a much more in sight, and 'supercharging the Android ecosystem' with Motorola Mobility will most likely have greater ruling in our living rooms than the courtrooms.