We believe that the Motorola acquisition was sold to the Google board as a patent deal, with the hardware business being an unwanted but inseparable part of the package.
Now Google faces a fundamental dilemma. The combination of Google and Motorola is like building a skyscraper in the middle of the ocean; the two companies are built on very different business models.
Google is a profitable, 28,000-strong direct marketing company. Google uses Android as a platform with which to commoditise mobile handsets, flatten network access and reach billions more consumer eyeballs.
Motorola, on the other hand, is an unprofitable, 19,000-strong hardware company, one that uses Android as a ticket to sell more hardware to more consumers and more carriers in the form of smartphones.
The question then is which parts of Motorola Google plans to keep, besides the patents. This presents a major strategy dilemma for Google – and one whose outcome will have fundamental impact on how Google runs the Android Empire.