Google's Motorola Deal Could Save TV Efforts

Before you go, we thought you'd like these...
Before you go close icon

Web giant Google (NAS: GOOG) this morning announced a $12.5 billion agreement to acquire Motorola Mobility (NYS: MMI) , a move seen as both an effort to pile up intellectual property at a time when patent wars could threaten the progress of Google's Android, and a surprisingly aggressive foray by Google into a handset manufacturing business it has only supported thus far through partnerships.

The patent play and the potentially thorny competitive issues that could arise with Google's existing Android handset partners are getting most of the attention today, but the part of Motorola Mobility that could prove to be a real game-saver for Google in another market is being overlooked. If the deal goes through, Google will gain a major position in the set-top box business that ultimately could save its Google TV platform from further ignominy and embarrassment.

With this deal, Google could in one fell swoop join the ranks of Cisco Systems and other major set-top box players, and have access to a stable of video technologies and software expertise that Motorola has acquired over the last decade or so.

That couldn't be better news for a company that rules the Internet and has found rapid success in the mobile industry, but is in danger of becoming a fast flop in the TV sector. The Google TV platform debuted last year to much excitement, but has received mostly poor reviews since, and has been blocked by a range of broadcast TV networks. Sales of equipment based on the platform reportedly have been awful, and Google TV manufacturing partners like Logitech (NAS: LOGI) and Sony (NYS: SNE) have responded to the market criticism and low demand by drastically lowering the prices on their Google TV-enabled gear. Logitech actually admitted that customer returns of its Google TV equipment actually began outnumbering new sales of the gear during the previous quarter.

The addition of Motorola's TV assets could go a long way toward rebuilding Google TV into a stronger platform -- or maybe just taking what works, putting it into Motorola set-top boxes and perhaps de-emphasizing Google TV as a separate software brand. The future technology path is not clear yet, but what is clear is that the deal could make Google into a different sort of player in the TV market, one that could be working directly with service providers on TV and home networking efforts.

This article originally published here. Get your telecom industry briefing here.

Related articles:

At the time this article was published The Motley Fool owns shares of Logitech International and Google. Motley Fool newsletter services have recommended buying shares of Google and Logitech International. Motley Fool newsletter services have recommended creating a write covered call position in Logitech International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners