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The Google-Motorola (GOOG-MMI) deal will be a "colossal disaster" unless Google sells off...

  • Tuesday, August 16, 2011, 10:17 AM ET
    The Google-Motorola (GOOG-MMI) deal will be a "colossal disaster" unless Google sells off Motorola's hardware business, Henry Blodget writes. MMI's sheer vastness - increasing the size of Google by 60% - is a major drag: Mergers of this size "rarely work well" even when managed by firms with experience in huge acquisitions (which Google isn't).
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    If Google is smart they'll keep the patents and a handful of key technical people and not even bother offering jobs to the rest of MMI. The relative sizes, cultural differences, and the idea of integrating a hardware and integrated products business into a software company are all reminiscent of the Oracle-Sun deal. That has proven to be a giant debacle as Oracle has mismanaged the hardware business, destroying the organisation's technical leadership position, alienating customers, and driving off most of the top talent, all while failing to generate growth. Also much like that deal, Google is paying a seemingly huge premium for a company that was undervalued by the market. Yet in the long run, Sun's shareholders would have done better if they hadn't sold. Everyone lost in that deal, and it seems all but certain that everyone will lose in this deal, too.
    16 Aug 2011, 10:27 AM Reply Like
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