Has Google Turned Into 'Darth Vader' With Its Purchase of MMI?

| About: Alphabet Inc. (GOOG)

As I was driving down the Pacific Coast Highway with the family today admiring the natural beauty that surrounded us, my mind was still completely flummoxed by Google's (NASDAQ:GOOG) purchase of MMI. The purchase was mostly perceived to be "defensive" and about "patents".

However, based on the following:

From the CC after the announcement, Larry P...

"Having spoken to some of the key partners of the Android ecosystem, they share our enthusiasm for this combination. I'm really excited about the acquisition and the possibilities it opens up for the Android ecosystem. My intention is to work closely with the Motorola teams and let Sanjay and his management team drive the business; that way we can supercharge both the Android ecosystem as well as the Motorola businesses...."

I had to step back and remembered the following:

1. GOOG has always maintained that Android was an "open" source.
2. "Open source" as defined by the GPL ("General Public License") means that everyone is free to use, share, improve and modify the code. However, if you do that and distribute it, you MUST make it available for others without delay.
3. HTC has been a regular violator of the GPL "standard". They usually withold it for 90-120 days. Obviously, it is for competitive purposes. IF HTC is indeed guilty of this, what can prevent the others from doing the same thing for competitive reasons?
4. GOOG has been criticized over its refusal to release Honeycomb. Begs the question if it really is "open".
5. AAPL and MSFT has NOT been shy to sue MMI. Wonder how sticky MMI's patents are...
6. ORCL is GOOG's biggest nightmare with Java; it is highly unlikely MMI will save them from this monkey.
7. GOOG just paid about two years worth of earnings for MMI.
8. GOOG had to pay a HUGE breakup fee if it walked away...
9. Despite what GOOG says publicly, Android is controlled by GOOG. This dispute and how it dealt with its partners is an example.

Given that GOOG must be aware of the following:

1. AAPL commands approximately 2/3rds of the handset profits and makes more despite less activations.
2. AAPL OS provides a differentiating experience.
3. HUGE mobile smartphone market

As my daughter's oversized Beats headphone was blaring Jessie J's "Price Tag" song that goes....

"Seems like everybody’s got a price,
I wonder how they sleep at night.
When the tale comes first,
And the truth comes second,
Just stop, for a minute and Smile"

I was thinking "obviously, GOOG has seen what AAPL can command when it comes to profitability and margins; let's get us a handset maker as well!"

GOOG's positioning of this MMI deal to their Android partners as a "defensive" move in the patent war with MSFT, ORCL and AAPL is pure smoke and mirrors.

GOOG has eyes on the big prize (ala AAPL margins and profitability) by letting the other Android makers right now infiltrate the mobile market with as much Android devices as possible which will be ripe for the picking later with a "better" phone from MMI/GOOG.

GOOG won't spin MMI handset division off. HTC, Samsung and all the other Android makers...watch out; you have been warned! It IS all about the money! Remember Anakin going thru the Jedi temple and slaughtering even the younglings?

So much for GOOG's slogan of "do no evil"; it certainly started with noble ideas. In the end, it seems that money and power almost always corrupts!

Disclosure: I am long AAPL.

Additional disclosure: may initiate a position in GOOG & NOK, may go short RIMM again.