Google Buys Motorola Mobility - Creating Big Opportunities and Risks for Schmidt, Page, Brin, and Company

In the high tech world, M&A transactions happen all the time. Some are noticeable; others fall through the cracks. Today's Google buys Motorola Mobility deal potentially changes the landscape in computing and communications. You can be sure all the big players - Apple, Microsoft, RIM, Samsung, Microsoft, HP, and HTC - convened their war councils this morning to try to figure out how to respond.

Google gains a lot, including:

• A huge base of cell phone users who currently use Android phones and could buy another Android phone the next time around.
• Access to 24,000 thousand patents related to mobile phones, tablets, and TV set-top boxes. Yes, Motorola Mobility is the largest provider of set-top boxes for TV sets and a natural home for Google TV and YouTube products when Google gets its living room act together.
• An integrated product platform that now includes hardware, software, carrier relationships globally, and new relationships with cable and telco providers. Basically, Google gains the ability to ape Apple's approach to winning the hearts and minds of consumers.

Nevertheless, for Google, the risks are great:

• An awful lot of Google phones are made by Samsung, HTC, LG, and Sony Ericson, which may now be motivated to look for other OS options. Phone and tablet OS providers, like Microsoft, HP, and Intel, will be making a lot of phone calls and getting on planes in an attempt to shift market share.
• Google does dozens of acquisitions to per year, but this one is different. DOJ almost didn't approve Google's acquisition of DoubleClick a few years ago, and the market impact of this transaction could be greater. Google just gained major market share in multiple markets, and antitrust regulators will be analyzing this transaction every which way since Sunday. Don't expect quick approval of those Hart-Scott-Rodino filings.
• If Google expects to be litigious with Motorola's patents, it should think twice. The effect of lawsuits goes both ways. The 13 year long IBM antitrust suit, which IBM won, did great damage to Big Blue's can-do culture - causing it to be much less aggressive just as competition was heating up and the computing world was embracing PCs and client-server. DOJ's multiple pursuits of Microsoft crushed an innovative, entrepreneurial culture that created huge wealth not only for Microsoft, but also for thousands of its software and implementation partners. Microsoft will never recover.

Right now, Google is a great company that is run by and is all about the great work of its engineers. Their engineers give us AdWords, search rankings, productivity apps, social networks, mobile operating systems, an answer to almost any question in an instant, and, for some companies, access to customers that they would never find otherwise. Google is a daily productivity enhancer for a billion people and millions of companies around the world. The day Google is run by lawyers, not engineers, would be a sad, sad, day.