That Google has since entered plans to divest Motorola's home business unit has now introduced concerns as to whether or not paying also $13 billion for Motorola was worth it. This is the group which includes set-top boxes and home networking.
Google is expecting the sale of the unit to generate approximately $2 billion. The decisions comes after rounds of job cuts and other cost saving measures that failed to produce the bottom line impact that Google once enjoyed in terms of profits.
When reports first surfaced of Google's Motorola acquisition, I doubted whether or not it would work. After all, what did Google know about hardware? The company wanted to be more like Apple and establish its own ecosystem with the hopes that its Android software would come together perfectly with the hardware. So far Google has gotten it half right since most of Android's dominance comes from partners such as Samsung and HTC.
Also the concern is not so much that Google is screwing up synergistic opportunities with Motorola, it is that competition is not sitting idle and waiting for it to get it right. Early indicators are that Apple's iPhone 5 has been a smash hit.Likewise, in addition to Microsoft's new Windows phone, there is also Nokia (NOK), which is hoping that its Lumia 920, that is due out later this month can turn the company's mobile fortunes around. So it's not as if Google has time for trial and error with Motorola.
Bottom LineWhile there is no doubt whatsoever that Google will overcome this, that Motorola reported $530 million in operating losses does little to inspire investor confidence that the acquisition was the right decision. Still, as disappointed as investors might be with what seems to be slow-moving progress, it's hard not to give Google the benefit of the doubt that it will eventually figure it out. The good news is that Motorola presents Google with a potential stronghold in a smartphone market that can one day drive Android further. The only question is when? If nothing else, that Google now owns roughly 17,000 Motorola patents, this should allow the company several options and avenues from which to maneuver. But in the meantime, it can't escape questions as to whether or not this deal will ever work. At the time of publication, the author was long AAPL and held no position in any of the other stocks mentioned. Follow @rsaintvilus This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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