Google's Bid For Motorola Changes Mobile Landscape

Google entered the phone business with its $12 billion acquisition of Motorola's mobile division. Steven Levy, author of In The Plex: How Google Thinks, Works, and Shapes Our Lives, talks to David Greene about what the merger means for Google and consumers.

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DAVID GREENE, host:

For the past few days we've been hearing a lot about Google's blockbuster $12 billion acquisition of Motorola's mobile division. The deal still does need government approval, but we were wondering what this could all mean for the mobile landscape and for consumers. And so we called up Wired magazine's Steven Levy. He literally wrote the book on Google. The book is called "In the Plex."

Mr. Levy, welcome to the program.

Mr. STEVEN LEVY (Author, "In the Plex: How Google Thinks, Works and Shapes Our Lives"): My pleasure.

GREENE: You spent two years inside Google researching your book, so you know a lot about the company. What do you make of this acquisition and Google's aim here?

Mr. LEVY: In a way, this acquisition is typical Google. They were faced with a problem. Its Android mobile operating system might be hampered by patent suits filed by competitors. And the way you usually resolve that is you say to those lawsuits, hey, if you sue me now I'm going to sue you, because I have patents. But Google didn't have the patents it needed for that response. So buying Motorola it gets those patents.

But also Google solved the problem by thinking bigger. Instead of buying some patent portfolio, it bought a whole company. And it's almost doubled Goggle's size.

GREENE: Google had this operating system, the Android. It went into phones. You're saying that they needed some patents to protect that. But they had said as of 2004, we're not going into the phone business.

Mr. LEVY: Right. They said that in 2004. Then the next year they bought this small company called Android and started their mobile operating system, which offended one of their partners at the time, which was Apple, and led to a big rift between those two companies. Now they have told their Android partners we're not going to compete with you, and now they are competing.

GREENE: If we look at this as sort of the next chapter in a Google/Apple rivalry, you know, Apple sort of had the model. I mean, they had the iPhone. They have both the operating system and the hardware itself. Now that Google is sort of entering that realm of having both should Apple be worried?

Mr. LEVY: Well, Apple has been worried, because Android phones are outselling iPhones now. Apple makes more money per phone because the Apple system enables them to get money from the hardware and from the software. Google makes money on the back end. Those Android phones are Trojan horses for Google's other products.

So I think Apple has to be, on one hand, a little concerned. But maybe Apple's going to sit back and say, well, let's see Google figure out how to change the culture of its company by integrating this other company and then figuring out how to deal with its partners who might be offended by this purchase.

GREENE: We had this landscape where Google had then Android system and they were working with phone companies, including Motorola, to install that system in the phone. Now that Google actually is going to own a phone company, Motorola, isn't there a pretty significant risk that other phone companies are going to view Google as a competitor and say, you know, take your Android and take it somewhere else. We're going to go to Apple.

Mr. LEVY: Well, there is the risk. But on short term, the relieve, they might not have such problems themselves in selling Android phones because of patent problems. But HTC and Samsung, two of Google's biggest partners, have had patent lawsuits filed against them.

And then on the other hand, where else are they going to go? You think about it - the other alternatives, like Microsoft, charge money. The Android is free to carriers and to handset manufacturers.

GREENE: For consumers like us, what will this mean in coming years? Are we going to see a major difference in any way?

Mr. LEVY: Well, here's the wildcard here. You know, Google has said one thing they're excited about buying Motorola might be to do really new innovative products and innovative business plans there.

Since Google likes to think big and be revolutionary, maybe they're thinking about doing something that's totally different in terms of a business model or maybe a design of a phone that we haven't seen before.

GREENE: So we could be seeing some commercial come out sometime soon. Look at this wild new Google-Motorola product.

Mr. LEVY: Right. Yeah. If you don't have a Goo phone, you don't have a Goo phone.

(Soundbite of laughter)

GREENE: There's the new ad.

Steven Levy is a senior writer at Wired magazine. Thanks so much for joining us.

Mr. LEVY: Thank you.

(Soundbite of music)

GREENE: This is NPR News.

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