Google Owns Motorola. Now What?

Yeah. It does. It took a while thanks to all the bureaucratic hoops they had to jump through, but Google finally acquired Motorola Mobility. They now make phones. And set-top boxes.

Now what?

The short answer is, nothing. Google will not become the new Apple. They will not favor themselves and create super-devices by tightly integrating hardware and software while ignoring the other developers like Samsung and HTC.

As part of the governmental approval, Google is required to keep Android open for at lest 5 years. But even without this requirement, there wouldn't be any point for Google to ditch its loyal partners. Why? Because Google doesn't make money on hardware. They never have. They have no experience at it. And selling software and advertising has much better margins.

Believing that Google would do better if it went exclusively with Motorola and stopped working with Samsung and HTC is like believing that Microsoft would make more money if it only made Windows work on Dell machines and not HP, Asus, or Sony.

The only way Google makes money on phones is through advertising. Could Google change that? Sure. Companies have pivoted in the past and did well for themselves in the face of financial problems. But why would they risk it? Google's advertising business is doing great. It makes no sense for them to change tracks and join a much more competitive market with much smaller margins.

Instead, Google will hold on to Motorola's patents. They will turn Motorola's set-top boxes into Google TV boxes. They will use Motorola to build the long-rumored home entertainment device powered by Android and Google Play. And they will use Motorola as their own hardware playground which they can use to test out cool and weird new ideas like +Project Glass and attempt to discover the device of the future.

All of this will be done to get Google software onto more devices and to stay ahead of the curve. Not for Google to branch out into a completely new and very risky market.