Microsoft, for years one of Google’s most bitter rivals, is desperately trying to make inroads in the mobile device market. John McCarthy, an analyst with Forrester Research, says Microsoft might try to counter Google by pursuing a long-rumored takeover of its partner, Nokia.
Oracle Corp. is seeking billions of dollars from Google in a federal lawsuit alleging that Android owes licensing fees for using the Java programming language that Oracle acquired from Sun Microsystems.
Buying patent protection offered by Motorola Mobility will be expensive. Although Google has $39 billion in cash and can easily afford it, the price translates to $40 per share, 63 percent above Motorola’s stock price before the deal was announced.
The deal also will test the ability of current Google CEO Larry Page to avoid a clash of cultures while he is still learning the nuances of the CEO job, which he took only four and a half months ago. With 19,000 workers, Motorola Mobility’s payroll isn’t that much smaller than Google’s 28,800.
Motorola Mobility, based in Libertyville, Ill., has been struggling to come up with a product that has mass-market appeal since it introduced the Razr cell phone in 2005.
The company had some success with the Droid, one of the first phones to run on Android, but it now ranks a distant eighth in the smart-phone market, with 4.4 million units shipped in the second quarter, according to research firm Canaccord Genuity. By comparison, the market-leading iPhone shipped about 20 million units.
An attempt to counter the iPad hasn’t paid off for Motorola Mobility, either. In an effort to drum up more demand, the company recently cut the price on the Wi-Fi-only version of its tablet, the Xoom, to $499 from $599.
The troubles saddled Motorola Mobility with a $56 million loss in its latest quarter, sinking the company’s stock price to one of its lowest points since its January spinoff from the old Motorola Inc. The remaining part of that company now runs as Motorola Solutions Inc. In contrast, Google earned $2.5 billion in its most recent quarter ending in June.
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