GOOGL - Google

[jeffmori7]

This is exactly the purpose of Android. To protect the mobile search market by ensuring Google is the default search engine on as many phones and tablets as possible.

[matjone]

That's why I don't understand why they are so bulletproof.  If they have to keep up in the gadgets and gizmos game to maintain their search share then what makes their moat so wide?

 

 

[DCG]

That's why I don't understand why they are so bulletproof.  If they have to keep up in the gadgets and gizmos game to maintain their search share then what makes their moat so wide?

 

 

 

That's a fair point.

 

Google's moat is in Search, and in their adwords/adsense business. When people have a choice in search engine, most people choose Google. People often don't go to Google.com to search. They use the built-in search on browsers. If the default search on popular browsers change, than in theory, that could hurt Google. It is of course east to change the default search on any browser back to Google, but less less computer savvy people won't change it back. The other side of this though, is that Internet Explorer is the most used browser in the world (for probably largely because many businesses don't let people install better browsers on company computers), and Microsoft set it to use Bing as the default search, and it had little effect on Google.

[Liberty]

Software patents are such a mess.. everybody infringes on everybody because there are tens of thousands of really obvious things that any skilled practitioner would come up with on their own that are patented (usually in legalese that has to be interpreted), and there's no way to really know if the code you're writing is patented somewhere..

 

Anyway, the saga continues:

 

http://www.dailytech.com/Judge+Finds+Apple+in+Violation+of+HTCs+Newly+Acquired+Patents/article22275.htm

[Guest valueInv]

Google seems to be on the defensive on the Oracle case also:

 

http://allthingsd.com/20110727/old-email-may-bite-google-in-java-patent-suit/

[Guest valueInv]

Another player in the mobile OS market. Could be derived from Android:

 

http://www.penn-olson.com/2011/07/28/aliyun-launch/

[Liberty]

Google bought patents from IBM, and might still buy InterDigital. This might be enough for MAD (mutually assured destruction) and keeping patent suits away.

 

http://online.wsj.com/article/SB10001424053111904800304576475663046346104.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond

[txlaw]

Google bought patents from IBM, and might still buy InterDigital. This might be enough for MAD (mutually assured destruction) and keeping patent suits away.

 

http://online.wsj.com/article/SB10001424053111904800304576475663046346104.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond

 

It's sad that Google has to go to such lengths to pose the threat necessary for a MAD strategy. 

 

The US patent system is a mess, and it's stifling rather than promoting innovation.  I recently listened to a good TAL episode that might interest you guys:  http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

 

There's a lot of focus on Intellectual Ventures, which is Nathan Myrhvold's company.  I was talking to a patent lawyer yesterday, and I brought up Intellectual Ventures, and he responded like so:  "Well, there are patent trolls . . . and then there are patent trolls!"  The lawyer also mentioned that IBM has some pretty idiotic patents.

[Liberty]

More good news about Chrome:

 

http://www.guardian.co.uk/technology/2011/jul/31/google-chrome-popular-web-browser

 

They mention that the goal was to help other browsers improve faster, no doubt because the faster the web is, and the more secure it is, the more pages people will look at, and the more money google will make (via searches, adsense on other sites, etc).

 

It's a bit like Android. Even non-Android products have been affected by it, mostly in ways that are positive for Google. Even non-Chrome browsers have been affected by it...

[Liberty]

http://mashable.com/2011/08/02/android-market-share/

 

Google Android captured 48% of the smartphone market in Q2 of 2011, hitting an all-time high, according to a report by market research firm Canalys.

 

Smartphone adoption continues to grow rapidly across the world, reaching a total of 107.7 million units shipped in Q2 of 2011, a 73% year-on-year growth.

 

Android was the biggest driver of smartphone shipments in Q2, as Android-based smartphone shipments were up 379% year-over-year, coming in at 51.9 million total units shipped. The report cites successful Android-based products from vendors such as Samsung, HTC, LG, Motorola, Sony Ericsson, ZTE and Huawei, as a catalyst for the platform’s growth.

[Guest valueInv]

Android seems to be running into more and more legal problems:

 

http://www.computerworld.com/s/article/9219024/German_court_s_ruling_may_pose_long_term_concerns_over_Android_?taxonomyId=88&pageNumber=1

 

http://fosspatents.blogspot.com/2011/08/judge-does-not-allow-google-to.html

 

 

 

 

[tombgrt]

http://online.wsj.com/article/SB10001424053111903392904576509953821437960.html

 

:o

[DCG]

http://online.wsj.com/article/SB10001424053111903392904576509953821437960.html

 

:o

 

Wow. At first glance, I don't understand them doing this, but have to read further into it. It sounds like they're buying it for their patents. What I don't want to see google doing is getting into the hardware business, especially while keeping android open source.

[abyli]

Larry Page's letter:

 

http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html

[Guest misterstockwell]

Larry Page's letter:

 

http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html

 

That's such a joke. You can't license a platform and also compete with your licensees.

[DCG]

I'm just not clear what they are looking to do with Motorola? What patents does Motorola own that Google must have? Is Google planning on using Motorola to produce hardware? If so, why not buy HTC, which produces better products? Page's blog is very unclear. Seems like either way, it will probably take a while to see a return on the $12.5 Billion investment.

[Liberty]

I'm just not clear what they are looking to do with Motorola? What patents does Motorola own that Google must have? Is Google planning on using Motorola to produce hardware? If so, why not buy HTC, which produces better products? Page's blog is very unclear. Seems like either way, it will probably take a while to see a return on the $12.5 Billion investment.

 

Motorola Mobility has 24,500 patents. Google's lawsuit problems are basically over, because they now have a "mutually assured destruction" type of defence.

 

Also, vertical integration of hardware and software seems to be the preferred model since Apple has shown how well it can work, though Motorola certainly isn't Apple and Google probably will not integrate it as tightly.

 

I'm still not sure what I think of this. But over the long term, what matters is the patents, IMHO.

 

I sold my GOOG recently (I figured a 20% profit in about a month wasn't bad) to raise cash for other more undervalued stuff I wanted to buy during the crash. But they are still definitely on my watchlist and I wouldn't be surprised to own them again someday.

[ragnarisapirate]

I find it hard to understand the logic where buying MOT actually enhances competition in the marketplace. Especially when he talks about buying MOT strengthening GOOG. Unless a stronger Google is good for competition...

[DCG]

Also, vertical integration of hardware and software seems to be the preferred model since Apple has shown how well it can work, though Motorola certainly isn't Apple and Google probably will not integrate it as tightly.

 

The isssues are that vertical integration doesn't really give you much of a competitive advantage when your operating system is open sourced (companies like HTC can still make better products using Android than Motorola/Google), and the open-sourced nature of the OS is likely to hurt margins on hardware (as it is already doing for the companies currently building Android devices). Secondly, Google tried vertical integration with their Nexus 1 collaboration with HTC and they failed at it. The device itself was fine, but Google was not at all prepared to handle the amount of customer service, tech support, & billing issues that came along with being a retailer. They also didn't take into account that due to the open source nature of Android, the lifespan of devices (before competitors release newer and better products) is incredibly short. Apple has control over that and the lifespan of their products is longer. Building their own hardware (and again, handling all the service and retailing issues that comes along with that) would most likely result in the need to spend a lot more on hiring many more employees.

 

I am a Google shareholder, but unless they close off Android to other developers, I don't see how them integrating hardware will be a good thing. Companies like Dell, HPQ and all the other computer manufacturers that build PC's running windows have learned how difficult it is to be profitable doing that.

 

I'd assume a majority of Motorola's patents are hardware related, correct? I have a hard time seeing how all these patents will allow Google to improve Android. If this is just a play at depending and preventing lawsuits, $12.5 billion seems like a pretty hefty price tag for that.

[bluedevil]

I think this is about Apple.  They've been phenomenally successful both in sales of products like the Ipad and in waging a patent war against Android phone makers.  This purchase:

 

(1) helps protect android's patent portfolio

(2) creates a company (MM backed by Google) that has the money and talent to wage a long-term battle with Apple in smartphones, Ipads, home tvs, etc.

 

I think the idea (like with the Chrome browser and notebook, Android, etc.) is not necessarily to make money off the venture, but to ensure that low-cost, high-quality competition crimps Apple to the point where it cannot start to monopolize certain categories of devices that then could be used to encroach on Google's cash cow -- search.

 

Apple is on pace for 28 billion (!) in profits per year.  Imagine Apple competing with a device maker that (1) gets its software free from Google and (2) is not overly concerned about profit in general; (3) has the enormous financial clout of Google standing behind it.  I don't think this company will kill Apple by any means, but it may be able to crimp Apple's profit margins and dominance in certain products.

[Liberty]

One thing that this brings into focus for me: If Motorola Mobile with its 24,500 patents and all of its hardware-making capabilities, etc, is worth 12.5b... Skype wasn't worth anywhere near 8b, IMO.

[Liberty]

An interesting comment from another forum:

 

If there is one company I trust to not screw this up it's Google and I think they have a good shot at getting this right. I'm sure their partner companies are going to be a bit ansy to start but they all compete on hardware / price anyhow which this doesn't change. A few points that pop to mind:

A. They already had to compete with Motorola, so they haven't lost or gained a new competitor.

B. They don't pay for Android so Motorola hasn't gotten some new financial edge. Google just has to ensure that all companies still get source releases at the same time. What they do with them is up to them. (aside: I expect we will see MotoBlur disappear with some of its key features rolled into future Android releases)

C. This will allow Google to protect Android much better which is very beneficial to their bottom lines, especially if it keeps patent licensing costs off of their products.

D. Google just has to be sure they don't play favorites but from what I have seen up until now they have been good about that.

E. This just brought the competition for who gets to build the next Nexus to an end. (unless the next Nexus is already basically "done" at another partner company)

I think they can get this right... and now hopefully we can get a whole line of nice Motorola hardware with current Android and unlocked boot-loaders, etc. I might have to reconsider the Droid 3 again (more like Droid 4 one day, since 3 is already in the wild as is)

[DCG]

I think this is about Apple.  They've been phenomenally successful both in sales of products like the Ipad and in waging a patent war against Android phone makers.  This purchase:

 

(1) helps protect android's patent portfolio

(2) creates a company (MM backed by Google) that has the money and talent to wage a long-term battle with Apple in smartphones, Ipads, home tvs, etc.

 

I think the idea (like with the Chrome browser and notebook, Android, etc.) is not necessarily to make money off the venture, but to ensure that low-cost, high-quality competition crimps Apple to the point where it cannot start to monopolize certain categories of devices that then could be used to encroach on Google's cash cow -- search.

 

Apple is on pace for 28 billion (!) in profits per year.  Imagine Apple competing with a device maker that (1) gets its software free from Google and (2) is not overly concerned about profit in general; (3) has the enormous financial clout of Google standing behind it.  I don't think this company will kill Apple by any means, but it may be able to crimp Apple's profit margins and dominance in certain products.

 

But how will the devices they make be any different than the devices companies like Motorola, HTC, LG Samsung and others have produced running Android? Apple currently competes with all these companies that get Android for free and it hasn't effected their dominance in certain products. Do you think Google branded products are really going to significantly outsell the Android products made by HTC, Samsung, etc? They can only really compete with Apple in terms of producing hardware if they close of Android to other companies.

[DCG]

An interesting comment from another forum:

 

If there is one company I trust to not screw this up it's Google and I think they have a good shot at getting this right. I'm sure their partner companies are going to be a bit ansy to start but they all compete on hardware / price anyhow which this doesn't change. A few points that pop to mind:

A. They already had to compete with Motorola, so they haven't lost or gained a new competitor.

B. They don't pay for Android so Motorola hasn't gotten some new financial edge. Google just has to ensure that all companies still get source releases at the same time. What they do with them is up to them. (aside: I expect we will see MotoBlur disappear with some of its key features rolled into future Android releases)

C. This will allow Google to protect Android much better which is very beneficial to their bottom lines, especially if it keeps patent licensing costs off of their products.

D. Google just has to be sure they don't play favorites but from what I have seen up until now they have been good about that.

E. This just brought the competition for who gets to build the next Nexus to an end. (unless the next Nexus is already basically "done" at another partner company)

I think they can get this right... and now hopefully we can get a whole line of nice Motorola hardware with current Android and unlocked boot-loaders, etc. I might have to reconsider the Droid 3 again (more like Droid 4 one day, since 3 is already in the wild as is)

 

This sort of implies that they will keep Motorola as a wholly owned subsidiary, which also doesn't make sense to me. Google's brand is much better than Motorola, so I don't see why they would continue to produce hardware under the Motorola name.

 

I also don't understand Android being free to Google. Pretty sure Google's developers don't work for free.

[zarley]

This sort of implies that they will keep Motorola as a wholly owned subsidiary, which also doesn't make sense to me. Google's brand is much better than Motorola, so I don't see why they would continue to produce hardware under the Motorola name.

 

I also don't understand Android being free to Google. Pretty sure Google's developers don't work for free.

 

Google's brand in phone hardware is nowhere near Motorola.  Plus, Google has historically gotten it's logo on third party android handsets, which I suspect it will want to continue (without the confusion of an actual Google brand phone line).  Killing the Moto brand would, I think, be counterproductive.