Google Follows Apple Into Hardware, But With Weak Hand
Google (NASDAQ: GOOG) will buy mediocre handset firm Motorola Mobility (NYSE: MMI). It is probably a play to compete with Apple. The difference is that Motorola has a relatively weak line of products, particularly compared with market leaders HTC, Samsung,…
The deal looks a bit like the joint venture between smartphone also-ran Nokia and Microsoft. Microsoft did not make an outright acquisition, but the arrangement is close. It gives Nokia an operating system other than its ancient Symbian product, and marketing dollars from Redmond. Microsoft gets a platform for its Windows wireless OS product, although the size of the Nokia platform is shrinking at an unusually rapid pace.
Most analysts have discussed the hardware aspect of the M&A move, but perhaps the more important aspect is the patent aspect. Google is effectively buying some 24,000 or so patents in the Motorola Mobility acquisition.
Perhaps the most stunning thing about the Google buyout of Motorola is the price. Google will pay $40 a share–$12.5 billion. That is a 63% premium. Before the acquisition, Motorola’s stock had fallen from $36.34 in February to its present $24.50–down 20%.
Google must see something in Motorola that no other company did. There were no other suitors knocking on the door
Douglas A. McIntyre
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.