News Analysis: Microsoft faces a serious competitive challenge from the Google-Motorola deal. But there are still a lot of countermeasures it can carry out to blunt the effect of this megamerger before and after it is approved. But it better get cracking.
With
Google now planning to acquire Motorola Mobility in a deal valued at $12.5
billion in cash, several companies in the industry are being affected. Android
vendors are wondering what the future will look like. Apple is waiting to see
how it should respond, and Research In Motion is left to worry if it has the
right solutions in place to take on a now-even-more-powerful Google.
But
Microsoft is arguably the company that will be affected most by the deal.
Microsoft, like Google, offers mobile operating systems to vendors that then
pack those into their handsets. Now that Google will be able to control both
hardware and software, the company is potentially in a much better position to
continue to steal market share from Microsoft, as well as take down the iPhone.
Luckily
for Microsoft, though,
it can do some things to blunt the potential effects of the Motorola
Mobility acquisition. Although these countermeasures will cost the software
giant some serious cash, it has no choice but to respond-and quickly.
Here
are the ideas:
1. Buy RIM
It
has been rumored for months now, but
Microsoft must finally pull the trigger and acquire RIM. Sure, the deal
might cost the company billions and it will face regulatory scrutiny, but it's
the smart move. RIM is still an enterprise favorite, which will give Microsoft
an advantage over Android-a platform that still only really appeals to
consumers. Moreover, RIM's shareholders seem ready to make a deal since they're
losing faith in their co-CEOs. The time has come for Microsoft to finally buy
RIM.
2. Acquire patents
One
of the key reasons Google acquired Motorola Mobility was its patent portfolio.
The company has thousands of mobile patents that will help safeguard the search
giant in court and potentially give it ammunition to go on the offensive.
Microsoft, which already has a massive patent portfolio, should try its best to
make some strategic acquisitions of more patents from other companies, such as
Kodak and InterDigital. At this point, it appears the strongest patent holding
will win the day in the mobile space.
3. Consider acquiring an Android vendor
Microsoft
should also consider acquiring an Android handset maker. Whether that means it
acquires the firm in addition to or instead of RIM is inconsequential. The fact
is, Android handset makers aren't necessarily happy with Google right now, and
it seems like a prime time for Microsoft to steal a vendor and bring it to its
own side.
4. Stay true to Nokia
When
Microsoft announced that it had inked a deal with Nokia to bring Windows Phone
7 to the handset maker's line of devices, some wondered why the software company
didn't just acquire Nokia. Although industry observers are calling for such a
move, Microsoft shouldn't do anything of the sort. Instead,
Microsoft should simply continue on the same path with Nokia. The fact is,
Nokia is a toxic company from an acquisition perspective, and Microsoft shouldn't
want any part of it
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