Google Acquires Motorola Mobility

Today 80% of Google revenue is coming from Google AdWords. There is no big alternate product for them to make money. Even though the Android OS is there, there is no big revenue model for them. In addition, they have stopped its Google Labs (new inventions) completely. But they are acquiring companies that have established products in connection with their products and integrating it and increasing their opportunity to make money.

In the past, they had the top three acquisitions

• DoubleClick an online Advertising company for 3.1 billion
• YouTube a Video sharing product for 1.65 billion
• AOL doing business on Broadband Internet Access for 1 billion

All are used in internet based businesses. Today they have announced the acquisition of Motorola Mobility for 12.5 billion is the record acquisition value for Google. This clearly shows that their investment and the reach of the Android will be effectively monetized. This is going to be the future of Google. Even if Google loses its popularity of AdWords (recent days, the ROI from Google AdWords are going down) this acquisition make Google to move to a greater level.

With this acquisition, the 17,000 exiting patents all over the world and the 7500 pending for approval patents are moved to Google. This will help them in competing with the Apple. Now Microsoft has to be aggressive in getting into the deal with Nokia. They all already moving their cards but Google was aggressive and made the greater move.

They have already acquired mobile ad company AdMob for 750 million. Their expertise in Ads (AdWords) will ensure that they are successful in mobile ads also in future.

Solarwinds also doing similar approach of acquiring companies related to their flag ship product and by integrating it with their existing products, they are increasing the product width.

Normally companies will face culture problem during acquisitions. In the web3.0 world, most of the acquisitions become smooth. The Motorola acquisition is going to be a challenging one for Google and they will ensure that their business approach in mobile market also smooth and successful.

Saravanan