Google's
(NASDAQ:GOOG) $12.5
billion purchase offer for Motorola Mobility (NYSE:MMI) is regarded by most
industry
watchers as a bid to secure patent protection, but one of the ancillary
benefits is an opportunity to fortify the search engine's Web television
service.
Unlike
the new Google+ social network the company appears to have poured its heart and
soul into, Google TV is struggling to gain significant traction. The service
uses Android software and the Chrome Web browser to let users surf TV channels
and Websites and access Web applications in the same context.
Google
TV is integrated in TVs and Blu-ray players from Sony, as well as in the
Logitech Revue companion boxes. However, those boxes are failing to sell at a
healthy clip, and Logitech
discounted them to $99, or one-third of what they cost at launch last fall.
Google
TV can use a spark, and Motorola may be able to provide it. In addition to building
the first signature Droid phone, Motorola has a large set-top box (STB)
business, selling cable boxes to TV providers such as AT&T U-Verse, which
uses them to deliver its services to users.
Just
as Motorola puts Android in its phones, the company could insert the Google TV
package in its STBs, or at least build new STBs with Android and sell them.
"Motorola
is one of the two big set-top box players in the U.S. market, the other being
Cisco's [NASDAQ:CSCO] Scientific Atlanta division," Current Analysis
analyst Avi Greengart told eWEEK. "Getting into set-top boxes was not the
purpose of the Google-Motorola Mobility acquisition, but it could have some of
the most interesting results, as it could significantly advance Google's
position in the digital living room."
ABI
Research analyst Kevin Burden agreed, noting in a research brief that while
Google TV has been viewed by many industry watchers as experimental, Motorola
has long had a "TV everywhere" solution.
"Google,
in contrast, had its foray into this space with Google TV seen widely as an
experiment. A tie-up between Google and Motorola could give Google the
expertise it needs to be taken seriously and gain an eventual foothold in
content delivery to the home," Burden added.
Credibility
and intellectual property and engineering talent in digital TV will go a long
way, but that isn't the only thing Google will gain for its fledgling TV
service. Motorola has tight relationships with cable companies, managed service
operators (MSOs) and broadcasters, Gartner analyst Michael Gartenberg told
eWEEK.
"Google
showed a lot of arrogance with Google TV with a sense of 'We're going to co-opt
that business and take control,'" Gartenberg said.
"Now
they have another story to tell about how they can go after this market
together. How they can deal with MSOs the same way they've dealt with carriers
in the past. It's not necessarily about co-opting their business, but about
partnering with their business."
Of
course, we might do well to curb our enthusiasm, said Greengart, who added:
"Google
TV today answers a question that few consumers seem to be asking. The bigger
challenge may actually be getting this to consumers. Even if Google can come up
with a compelling consumer value proposition, it may not be able to get it into
the living room. The set-top box customer is not the consumer but the MSO.
Cable companies have not always been looking to add OTT (over the top) options
to the hardware that they buy and rent to their subscribers. Google will also
have to provide a separate value proposition to MSOs that compels them to order
Google TV enhanced set-top boxes rather than regular ones."
Indeed,
just because Google will have the assets doesn't mean it will manage them
within the realm of our expectations. Certainly no one saw it bidding to buy
one of its top Android OEM partners. Google
could just as easily sell off Motorola's phone and STB businesses and simply
keep the patents.
Like
so many other things with the Google-Motorola merger, including the question of
whether or not federal regulators will pass it, the deal is up in the air.
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