There is just one problem with this theory.
And that is that Google has said it's not happening. Google is saying that it won't integrate Motorola's Android businesses, but rather treat it as if it were "any" Android third party such as HTC or
. It will deal with this business on an "arms-length" basis.
So what's the point? There is the worst kind of contradiction here. Google is saying is that it will run Motorola as a separate business because it doesn't want to annoy companies such as HTC and Samsung that compete with Motorola's Android devices.
If Google isn't integrating Motorola's Android business, then what's the point of owning it? Google might as well buy small minority shares in the open market of companies such as
, HTC and Research In Motion.
But if Google spent $12 billion buying small minority stakes in Dell, HP, HTC and RIM in the open market, people would question Google's sanity and the stock would decline. People are not investing in Google in order for Google to be a passive investment fund.
In other words, Google owning Motorola's Android businesses but saying that it will "keep it separate" makes no sense. Either you integrate the business and compete directly with Apple and RIM on their own terms, or you get rid of Motorola's handset and tablet businesses. You can't have it both ways.
The theory here is that, these days, a hardware business is only worth anything anymore if it's integrated with the company owning the operating system.
If the hardware company only stamps out hardware fed to any and every company by an operating systems provider (such as Google and
), then you are basically only like Dell, HP or HTC, just to pick a few. You can try to compete with the Chinese in making hardware running Android or Microsoft Windows. Good luck!
Thus, Google's ownership of a Motorola Android business that is not integrated is a losing proposition that will generate low to nonexistent profits and serve as a drag on Google's stock.
Either Google divests the Motorola Android business or it integrates it. So far, Google's official story is to do neither. This is the big question for Google.