Opinion: The search giant getting into the hardware business seems dangerous, and Google would be wise to enter the hardware fray through acquisitions, not ownership.
If I were a competitor and had just heard that Google was "getting into the hardware business," Id be ecstatic.
What better way for an advertising-supported media company, like Google, to wash through a few billion dollars and see the attention of executives diverted away from the companys main playwhatever that turns out to be.
Id imagine this is the same way Lenovo must have felt when its executives heard that HP and Compaq were merging, or perhaps eMachines and Gateway.
Not that those mergers closely parallel Google, its that they illustrate how tough the PC hardware business has become.
Click here to read more about Googles potential move into consumer hardware.
Can you imagine another multibillion dollar company announcing they are getting into the PC hardware business and not seeing its stock price fall through the floor?
Yet, somehow, if thats what Google announces at the Consumer Electronics Show, its stock will rise to a new high, regardless.
General consumer electronics is, if anything, more competitive than the PC hardware business and is an industry where tremendous technical smartswhich Google certainly hasdont always translate into a winner at Best Buy.
That isnt to say there might not be a place for the Google name on hardware, or that the company shouldnt be selling its search appliances to corporate customers. In the case of the appliances, they are just a way for Google to deliver search technology to enterprise customers.
Acquisitions make the most sense.