10 Motorola Mobility Headaches Google Must Cure Quickly
NEWS ANALYSIS: Motorola was one expensive purchase for Google and now, it’s causing major management headaches for the search giant as it searches for a way to make this huge division profitable.After Google acquired Motorola Mobility for $12.5 billion in May 2012, the search giant said that the focus of the deal was patents. Google reassured its Android partners that Motorola wouldn’t get special treatment, and told regulators that it would allow Motorola to operate independently without fear of too much oversight from its corporate overlord. For the most part, Google has made good on that promise. However, as Motorola’s parent company, Google has a fiduciary responsibility to shareholders to ensure it can prove to them that the deal is going to produce a decent return on this massive capital investment. In its effort to do just that, Google has been forced to lay off a large chunk of Motorola’s staff and consider selling off at least one division. It turns out that Motorola might have been worth much less than the $12.5 billion Google invested, and the only way for the search giant to get its cash back is to trim the operation and refocus it. Doing so might be difficult. Motorola is in a bad way. The company generates a comparatively small amount of revenue in the mobile space and its products have yet to even match Samsung’s. There are a number of problems that, if not fixed promptly that could prove that the deal was an expensive mistake that brings down Motorola and harms Google’s profitability and credibility with investors.
Read on to find out more about Motorola’s troubles and what the company should do to address them.