The Goog Abides: Will Motorola Acquisition Mean a Closer Relationship With Carriers?

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

As with other companies like Microsoft (NAS: MSFT) , Cisco Systems (NAS: CSCO) and to a lesser extent Apple (NAS: AAPL) and Netflix (NAS: NFLX) , it has always been difficult to determine whether Google (NAS: GOOG) is a friend or foe -- or more one than the other -- to telecom service providers. Will Google's planned $12.5 billion acquisition of Motorola Mobility (NYS: MMI) clarify the relationship?

Maybe, or maybe not.

Google has spent a lot of time in opposition to public network operators, whether opposing their Internet traffic management efforts, mucking up their spectrum acquisition plans or mocking their limited broadband ambitions by planning its own community networks. Motorola, meanwhile, is a long-standing service provider friend and supplier, and traditionally there has been little confusing that fact.

In some ways, the Motorola deal looks like it could finally help Google gain some traction as a supplier and partner to the service providers, both in the mobile and video/home networking arenas. It is not that Google could not get a seat at the table with carriers -- it just was not able to speak the same language as the carriers, or understand their needs. In some cases, it may have even seen Motorola establish the type of Android relationships with carriers that Google itself may have desired.

Although, that would suggest Google always wanted to be closer to the carriers. We can't pretend the Google-Motorola deal is all about the carriers. It is much more about patents and devices and a few other things before it'd about doing business with the carriers. But, Google would probably still like to exploit the business potential of working more closely with carriers. It is, after all, another potential revenue channel for a company still somehow identified as an advocate of a supposedly free Internet.

Amid Google's patent grab -- and probably the ensuing calls for patent reform -- something curious may happen in the background. Google may develop more direct partnerships with the carriers, mostly merely by virtue of owning Motorola Mobility. It might become more a carrier friend than it has ever been before.

That does not mean the relationship will not continue to be complex. From Google's closer perch, it may still peck away at the things it does not like about the carriers, including perhaps some of their ideas for building broadband networks or managing Internet traffic. And, like Microsoft or Cisco, Google may end up selling carriers' software and hardware in some instances, while indirectly competing with them in other ways -- like allowing Google TV to be used by consumer electronics companies or others that might use it to bypass pay TV.

However, this kind of relationship may be just fine with the carriers. In the old days, we telecom dinosaurs called it "coopetition," which was a nice way of saying that you sometimes end up competing with your own partners and customers. I used to wonder if carriers would really do business with a vendor that also sold to enterprises they might target, or a software giant whose video game platform could steal some action from their pay TV set-top boxes, but Cisco and Microsoft have made it work.

I'm sure this new company Googorola (Motoroogle?) will do just fine, too, as it becomes the latest carrier "coopetitor."

How about "Moogle?"

Related Stories:

At the time this article was published The Motley Fool owns shares of Google, Microsoft, and Apple. The Fool owns shares of and has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended buying shares of Netflix, Cisco Systems, Google, Microsoft, and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended buying puts in Netflix. 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