When Jason Cieslak, Siegel+Gale's managing director based in Los Angeles, first heard the news that Google would acquire Motorola Mobility, he assumed the move became a "knee-jerk reaction" in response to losing the Nortel patents bid by a consortium of heavyweights such as Microsoft. There's actually more to the buyout found in set-top boxes and Internet TV.
The acquisition should have interesting implications not only for the tech-industry Android developers, but consumers, too. Many people believe the acquisition suggests that Google will enter a vertically integrated market segment similar to Apple, but Cieslak doesn't believe that's the strategy. "Google didn't demonstrate a whole degree of skill when launching Nexus, their own homegrown mobile device," he said. "I'm not sure if developing devices is part of the company's core DNA, so the next move once the deal closes will bring up interesting issues."
Some of those issues take Google's focus away from core advertising services and toward device building to compete with HTC or Samsung. Cieslak isn't so sure these companies -- which build Android running devices -- would agree to a partnership that pits Google competing for handset market share. It seems like a strange "cooperative dynamic," not a model even similar to Apple or Microsoft.
This might send Samsung or HTC into the arms of Microsoft or Hewlett-Packard, Cieslak said. Expect some consolidation in the mobile industry during the remainder of the year and through next year.
For application developers, while the move to acquire Motorola Mobility patents will protect many building the Android OS into devices, the platform is highly fragmented, which makes Cieslak think that maybe some will give Apple's or Microsoft's OS another look.
For advertisers, the deal clearly reinforces Google's position to expand into Internet TV and services. Motorola is one of two very important companies when it comes to set-top boxes and services, generating nearly $3.6 billion in revenue last year in the space.
Pull Internet TV into the mix and tie it with search. Some might argue that this combination makes TV advertising the primary driver back to the Internet or mobile devices, fueling search. Some believe television is the most effective media in driving consumers through the purchase funnel.
Microsoft made it clear Wednesday that "Bing is more than just Microsoft's search engine, competing to win against Google." Pointing to Internet TV, Frank Shaw, VP of corporate communications at Microsoft, wrote in a blog post: "we'll be rolling out further advances in entertainment over the next few months."
TVB.org suggests that national retail advertisers using spot TV to geographically customize campaigns around various school opening dates in different parts of the country might better maximize the effectiveness of their ad dollars. Many consumers who see a TV ad turn to a search engine to research the product or service.
A recent study from TVB.org shows that 22.4% of consumers who took action after seeing a television commercial went to the Internet to either learn more about a product or service, tried to find the advertisement on the Web, or sent someone a Web site link about the product.
For Google to build an infrastructure based on Internet TV that drives consumers from lean-back to lean-forward marketing services it needs Motorola's Mobility division to outpace Apple and Microsoft.