The Truth About Google-Motorola: It Could End Up Being A Disaster

This deal could end up being a disaster. How? For starters, the deal creates major channel conflict: Google is now competing with its partners. And hardware manufacturing is an entirely different kind of business than Google's core business. And hardware manufacturing is a crappy, low-margin commodity business. And Motorola is massive -- Google has just increased the size of its company by 60%. And the deal appears to be purely a defensive move, not an offensive one. And so on.

Larry Dignan, on the other hand, says six reasons the deal makes sense:

1. Integration may be all that matters in the wireless industry;
2. Google lands its patent treasure trove; Google gets a TV play;
3. There’s a good chance that Google can keep hardware partners in the fold -- for now;
4. The deal forces Microsoft’s hand: there’s no money in third party operating systems in the mobile space. The upshot: Mobile software players need a hardware component. As a result, Microsoft may be forced to acquire a hardware player.
5. With Motorola, which has some enterprise credibility and Android innovations, Google can enter the enterprise easier. As a result, RIM increasingly looks like the odd man out. Nokia is already under fire as it waits for Windows Phone 7 to gain traction.