The media landscape shifted seismically yet again last week with Google's announcement of plans to acquire Motorola Mobility for $12.5 billion. In what appears to be a brilliant move, Google managed to consolidate its positions in the three screens of media -- computing, television, and mobile -- in one fell swoop.
This is as big a deal in the media and tech space as has come along in years.
While industry pundits have speculated on Google's reasons for the acquisition, my bet is that Google's longer-term rationale for the move is about data. With unprecedented access to data from mobile devices, browsers, ad networks, and set-top boxes, Google will ultimately be able to take audience targeting to entirely new levels within and across platforms.
Even in the near term, though, the implications of this deal for those of us in the TV space will be at least as significant as they are for Google's current mobile manufacturing partners (who, at the moment, must still be trying to figure out which way is up).
The Google acquisition of Motorola Mobility is a three-legged stool, resting on mobility, television, and intellectual property (patents).
First, mobility is all about computing anywhere, and that's where our world is headed. Computing at home, on the go, in the air, on TV, and anywhere else you can imagine. But what is computing? Now it includes any media, anytime. And Google has a powerful and popular mobile platform in Android. Combining it with Motorola's manufacturing prowess could bring Google the tight integration between hardware and software that Apple has. (But will this mean Android becomes a walled garden?)
Second, as for television, with Motorola Mobility Google gains fully half of the market in set-top-box manufacturing, giving it a more demonstrable foothold in the home. Google TV hasn't gained the traction Google had hoped for, but with the integration of set-top boxes, Google TV will be able to provide a far more compelling and immersive television experience than it has yet been able to deliver. And if it really wanted to leverage the television piece, the possibilities are near endless. I mean, think about what the android platform is -- an interactive entertainment platform on your big screen at home.
Of course, the jury's still out on how involved Google will be - and how involved MSOs will allow Google to be - on the television front, but things could definitely start to get interesting. I know I'll be watching closely for Google's next move on this front, as I'm sure will many of you.
And then there are the patents - more than 17,000 in all (plus 7,500 applications). More and more, companies are beginning to appreciate the value of patents as an essential driver of innovation. Patents protect firms' investments in innovation; without them, individual competitors would be unable to help move an industry forward. Even in our little corner of the tech industry, there have been a surprising number of patent disputes over the last several months, with at least three pairs of competitors engaged in lawsuits even as I write (including, in the interest of full disclosure, my own company's row with WPP).
Google has often gotten the short end of the IP stick. (Just last month, it lost out on a bid for Nortel's patent portfolio to a consortium that included Apple and Microsoft.) But with the patents Google is set to acquire from Motorola, it'll have ample IP ammo to defend itself from competitors seeking to slow it down on the mobile and television fronts.
Of course, even from the security of its Motorola-amped position, Google will face some formidable challenges in consolidating the operations and assets of the two firms.
First, there will be the cultural challenges. The two companies share certain characteristics in common, but in many ways -- from dress code to cafeteria menus -- they couldn't be more different. With Motorola's strong identity and near parity on employee population, the cultural pendulum isn't likely to shift easily in Google's direction, either.
Another major challenge will involve Google's acquisition of a second-place position in TV. After all, Motorola only owns half of the set-top-box marketplace; the other has belonged to Cisco since its 2006 acquisition of Scientific Atlanta. Even as it inherits a rich legacy of innovation from General Instrument (part of Motorola since 2000), which led the digital revolution in 1989 with the first digital HDTV submission, Google will find it more difficult to drive the entire TV industry as it has the online ad marketplace.
Finally, the acquisition introduces a new level of complexity -- and a new kind of impetus for partnership -- to Google's business. Google has not enjoyed the best reputation when it comes to partnering in a complex ecosystem (see: Viacom); this at least partly explains why Google TV hasn't yet found its legs. Will Google's relationships with its 39 Android mobile hardware licensees remain intact as Google itself joins the manufacturing ranks?
We'll all have to stay tuned to find out.