The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- In recent weeks, I think the probability of
(GOOG - Get Report)
Research In Motion
has gone from almost 0% to somewhere in the ballpark of 50%, and I believe there are three dominant reasons why.
Before I get into my three arguments, I need to mention two things:
1. I have absolutely no knowledge that Google and RIM are even talking to each other. I often meet with people from Google and RIM, and on the occasions that I have brought up my theory, these people have given me feedback to the effect that I am probably crazy and that they would eat their own hat if it would ever happen.
2. I have to give full credit to Kevin Michaluk, founder and editor in chief of the outstanding Crackberry.com blog, who published
on July 4, awakening my thoughts to the serious idea of Google acquiring RIM.
My initial reaction to the idea was to dismiss it largely based on the antitrust argument. Google needs another Department of Justice investigation just like Obama needs another increase in the unemployment rate. This argument remains valid in principle, but it is mitigated by the relative increase in importance of the other factors. RIM recently fell below $24, is expected to make $5.50 in earnings this year and has $3 billion in cash, making it a very easy buy for Google, even if you assume a monster 100%-plus premium.
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The market's recent fall may also cause the feds to pull back their attack dogs in order to allow corporate America to engage in their constitutional right to pursue economic freedom, including merging.
If the feds are going to approve
(T - Get Report)
$39 billion acquisition of
, how could they in good conscience block a smaller deal to acquire a company which the pundits are telling us is falling off a cliff?
Here are the three most powerful reasons Google should acquire RIM, right now:
1. Platform convergence
On Sept. 28, 2010, I published an article suggesting that
RIM's PlayBook tablet will be running Android apps
. This theory of mine was subsequently confirmed by RIM in March 2011, and it will be extended to the QNX-based BlackBerry smartphones some time in "early" 2012, however RIM defines the term "early." RIM looks to launch its Android app compatibility on the PlayBook soon, probably within the next month or two, although delays have been a recent RIM standard practice.