Google's Motorola Deal Could Up Ad Inventory

Smartphone-Motorolla-AGoogle's $12.5 billion acquisition of Motorola Mobility plays into the company's GoMo mobile strategy. Already a force in the mobile computing biz, the company's largest purchase gives it a treasure trove of about 17,000 patents to defend. Plus, it supports its Android operating system against Apple, Microsoft and others.

Yet some in the advertising and marketing industry have concerns.

Ad agency executives like Rob Griffin, EVP at Havas Digital, believe Google bought Motorola Mobility for the patents. With Motorola, Google can support emerging markets with lower-cost devices, said Amielle Lake, CMO and founder, Tagga Media, which focuses on mobile advertising. 

Lake points to an In-Stat report published earlier this year that predicts Android will own 80% of the African, Chinese and Indian mobile market by 2015. Google could succeed in delivering devices for $150 or less and chips for $10 or less. The adoption of smartphones by emerging markets means an easy reach to consumers.



Motorola provides a gateway to cheap handsets, but also tablets and cable TV boxes, which increases Google's ad inventory, she said. The acquisition will test Google's ability to keep advertisers -- which could also be rivals -- happy.

Google Android continues to grow its share of the U.S. smartphone market, accounting for 51% of subscribers in March 2012, while Apple captured more than 30%, according to comScore. The research firm said Samsung ranked the no. 1 OEM with 26% of U.S. mobile subscribers, followed by LG with 19.3%, Apple with 14% of mobile subscribers, and Motorola with 12.8%.

More Android handsets means that Google keeps tighter control of search ads and display. For marketers and advertisers, the closer integration between platform and device should drive scalable and innovative advertising opportunities, said Roger Barnette, IgnitionOne president.

Android proliferation across device manufacturers is important for Google. "It gives them a platform for various business interests, but the Motorola deal is a potential threat to that," he said. "Handset manufacturers are rightfully concerned because the maker of their operating system now owns one of their biggest competitors."

Barnette said Google will work to overcome these fears and endear hardware makers by working with key manufacturers to develop preferred devices that close the loop between handset and platform. It should help the companies compete more effectively with Apple.  

Google and Motorola announced the agreement last summer, but approval from Chinese regulators dragged on. Regulators in the U.S. and Europe cleared the deal three months ago. China approved it Sunday on the condition that Google's Android software would remain free for other phone makers for at least five years, which seems out of character for Chinese regulators.

Dennis Woodside steps into the role of Motorola CEO from president of Google's Americas region. Sanjay Jha, the departing CEO, will stay on long enough to ensure a smooth transition.

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