Let’s assume, for a moment, that you don’t watch the local news, you ignore national headlines, and you bypass the newspaper kiosks on your walk to work. Still, despite all this, you’ve likely heard about Google’s recent agreement to acquire mobile phone manufacturer Motorola Mobility. That’s because everyone from software developers to casual phone dialers are talking about the bright future of Android-powered smart phones once tech giant Google is at the reigns of both the Android operating system (OS) and a major mobile phone manufacturer. Of course, the acquisition must still gain government approval, but several analysts have had no problem jumping the gun and proclaiming that this will be a game-changing event for the tech market.
If you’re like me, when you hear “Google,” you immediately think of California, but Motorola Mobility’s acquisition could be notably beneficial to the Greater Boston area as well. Since 2008, Google has maintained a staff of over 150 employees at its four-floor location at 5 Cambridge Center. Moreover, Motorola Mobility operates a key location in Lowell, Massachusetts. Both facilities have a pool of talented programmers, developers, and engineers at their doorsteps. There is definitely potential for them to increase their recruiting activity in the area following the acquisition.
The purchase of a hardware manufacturer is out of character for Google and clearly demonstrates the value the company places on the future of the smart phone market. This acquisition would increase sharing of technology between Motorola Mobility and Google, accelerating the innovation cycle. Still, it is anticipated that Motorola Mobility will continue to operate separately from Google, using the Android OS under license--an arrangement that has been in place for years now.
Although Google has yet to gain approval for its acquisition from the federal government, analysts point out that vertical integration, or the purchase of suppliers by producers, is often less likely to spark antitrust concerns than horizontal integration, in which companies purchase direct competitors (ie. Yahoo, in the case of Google).
At the very least, news of this pending acquisition likely brought a smile to Google stock holders as they checked quotes on their smart phones or caught a glimpse of green on the stock ticker by South Station as GOOG flashed by. The anticipated acquisition bolstered investor’s perception of Google’s future and the company’s stock value. Optimism on Wall Street is good news for everyone.