Query on Google's Strategy

Maybe Google's next big purchase will be in Hollywood.

Investors could be forgiven for fearing such an offbeat script after watching the search giant agree to buy Motorola Mobility for $12.5 billion. That deal has strategic logic, in as much as it builds up Google's patent portfolio in the mobile industry. But it raises questions about Google's overall strategy. And the company's willingness to diversify into a lower-margin, highly competitive industry where it has little experience makes a Hollywood film studio purchase seem somewhat less outlandish. Indeed, buying a studio would help Google's YouTube -- which is reportedly expanding its offerings by spending $100 million on original content -- just as buying Mobility is meant to bolster Google's Android mobile operating system.

Most likely, a big content company purchase is the last thing on Google's mind. But after Monday's bombshell, Google needs to clarify its growth strategy for investors. Is its focus still on advertising, with free products like Android designed to gain market share in new areas to support ad sales? Or has Google decided that mobile advertising is growing too slowly and instead it wants to be like Apple, which has become the world's most valuable company by integrating hardware and software. Most likely Google hopes to do both.