Motorola makes Google Comcast's slave, not its master: report
It's 'vacuous nonsense' to think Google-Motorola will compete with Comcast, its giant customer and ad ally, writes Craig Moffett
"There has been a great deal of vacuous nonsense written over the past few days" on the Google-Motorola deal, writes Craig Moffett, veteran telecom analyst at Bernstein Research in New York, "with the worst of it adopting the absurd premise that Google's entree into (Motorola's Google Android) and (Horsham-based cable TV) set-top box businesses is a prelude to further disruption."
To the contrary, writes Moffett: "It's hard to imagine a strategy less likely" to overturn Comcast, Verizon, and other big-money Internet and wireless giants, than Google's $12.5 billion planned purchase of Motorola Mobility. (For a different view of Google-Motorola's "threat" to TV programming giants, see my summary of Tony Wible's report to Janney clients, here.)
Google won't risk those sales, writes Moffett: "Motorola doesn't sell (wireless) handsets to you and me. They sell them to Verizon. They don't sell set-top boxes to consumers either. They sell them to Comcast. How likely is it that Comcast would place an order for set-top boxes" loaded with Google video-straight-to-Internet features that would "undermine" the classic cable TV monthly-billing model, encouraging cable users to cut the costly cord? That would drive Comcast straight to Asian suppliers, he says.
Moffett compares Google's abortive past efforts to replace the TV business (GoogleTV!) to Microsoft's 1990s attempts to do the same (WebTV!). Microsoft ended up deciding it was better to work with Comcast (with a $1 billion 1997 investment, followed by Comcast's purchases of Microsoft set-top boxes it left "to molder in a warehouse" and a Microsoft Interactive Programming Guide on which Comcast has since "pulled the plug"). Microsoft sold its Comcast shares in 2009, and seems to have turned its back on the dream of cable-free Internet TV.
Google, too, will likely decide it wants Comcast as a customer, not a competitor, Moffett concludes. Maybe Google will sell the Horsham plant (it's profitable, but not big enough to much affect Google results), and let someone else supply Comcast's hardware. Meanwhile Comcast can help Google sell personalized advertising, and to intimately measure Web use by the Comcast customers who use that advertising. Digital advertising, after all, is Google's main business.
