Why did Google acquire Motorola Mobility?  There is no shortage of hypothesis and opinions being published and discussed but, as we all know, it will take some time to fully understand the risks and opportunities that Google will face and enjoy as result of this move.

One reason everybody seems to agree on is the large patent portfolio that will now belong to Google.  This is clearly stated in Larry Page’s blog post on the acquisition as it will “enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies”.  Motorola’s Mobile Devices business segment has a total of 14,600 granted and 6,700 pending patents, including patents related to 2G, 3G, 4G, H.264, MPEG-4, 802.11, OMA and NFC.  The Home business segment has 1,900 granted and 1,300 pending patents.

Having said this, as FOSS Patent points out, these patents may not be enough to win the on-going all-out patent war between Google and its rivals.  Both Apple and Microsoft are in the middle of legal battles with Motorola and, it would seem, they have the upper hand.

So, does this mean it is not really about patents?  Not so fast…  As Om Malik reports, Microsoft was also negotiating to buy Motorola’s patent portfolio and that Google’s negotiations kicked up five weeks ago, shortly after they lost the bid for Nortel’s patent portfolio.  The negotiations have gone very fast with Google CEO Larry Page and Motorola CEO Sanjay Jha talking directly and only involving a handful of executives – it seems that Android co-founder Andy Rubin was brought into the talks only very recently.  Something made Google react quickly and, it could very well be, a combination of Microsoft’s interest and their loss of Nortel’s patent portfolio.

In any case, the acquisition gives Google the opportunity to be ‘playful’ in a number of new businesses into which they had not reach before. 

One of those new business opportunities may be connected TV and using Motorola’s home solutions – automation, set-top box and broadband gear business – as a platform to jump into the home space and take part in the convergence of broadband and data.  This is right in line with Larry Page highlighting that Google has acquired Motorola not only because of its strength in Android smart-phones and devices, but also for being a “market leader in the home devices and video solutions business”.

Motorola could help Google improve the less-than-stellar results it has achieved with Google TV.  Motorola manufactures a large percentage of the set-top boxes in the US and, even if not successful, Google TV has some good features and the products of the two companies could be integrated.  This is a very profitable business and together they could make it even more profitable.

Another, possibly great, business opportunity is for Google to become the new Apple, integrating hardware and software to create a unique experience for its customers.  Granted, it will be difficult for the software company to fully integrate the hardware giant – not in the least because Google will see the size of its work-force double – but the combination of the two corporate cultures could still bring out the best of both.  At the very least, why not use Motorola as a test-bed for its latest-and-greatest releases, for the acceptance of ‘straight-up’ Android interface and for the use of specific form-factors?  At the end of the day, Google has already treated device makers differently, with some getting ‘private branches’ of the code in advance.  Maybe the idea of an artificial Chinese Wall put up inside Google is not realistic. 

This would seem to go against what Google’s initial PR release and all its further public comments where they have clearly stated that Android will continue to be an open system and that they will continue with full support of all of their OEM partners.  And this would seem to make sense.  Google allotted plenty of time during its latest (8) I/O conference to discuss the future of Android and it included Android-powered car consoles, refrigerators, dish-washers, clock radios and, basically, everything that had an LCD screen.  Therefore, why limit themselves to a single manufacturer?  Android needs to increase its mindshare as quickly as possible and to generate loyalty, this may be best done through multiple OEMs.

All in all, it is clear that we don’t yet know why ‘Googorola’ was born or what it will achieve but, for sure, it will be an interesting ride for all of us and it will, it has, challenge many current assumptions as to what the industry will look like in 5 to 10 years.

'Android is not free.  Android has a patent fee.  You do have to license patents.' stated Microsoft CEO Steve Ballmer in an interview last year with The Wall Street Journal.  A fee paid to Microsoft, not Google, mind you. 

If Samsung is made to pay this fee in the near future, as Microsoft is trying to do, it will be the end of Android as a free OS.  If to this we add the fact that both Microsoft and HP are now offering their own rival mobile OSes backed by a vast array of patent protection, some of Android's OEM partners may begin to think twice about their firm Android commitments.  Android as a free mobile OS that rivals iOS in terms of functionality is an unbelievable proposition.  But Android as an OS that requires you to pay Microsoft for each unit shipped is less so.   

Google's last great chance to save Android in this regard may have been the Nortel patent purse with over 6,000 patents spanning LTE, wireless video, Wi-Fi and Internet search innovations.  Unfortunately, the search giant lost the rights to those patents in a bidding war against its rivals. 

The bidding was an long and exciting game where, after 19 rounds, Rockstar (Apple, RIM, EMC, Ericsson, Sony and Microsoft) paid $4.5 billion for the patents leaving Ranger (Google and Intel) out of the game.  Apple reportedly paid $2 billion for 'outright ownership' of the set of LTE patents, RIM and Ericsson paid $1.1 billion together for a license to the portfolio.  In addition, RIM will receive Canadian tax breaks for shouldering some of Nortel's operating losses and could potentially break even on the deal.  Lastly, storage maker EMC is said to have negotiated a side deal for exclusive ownership of a small set of patents.   

Legal experts have noted that Apple, with close to $70 billion in cash reserves, could have purchased the patents on its own and may have chosen to partner with others in order to diminish the chances of the deal being blocked over anti-trust concerns.  Granted, Google, which itself holds around £37 billion in liquid assets, could also have bought the portfolio and still be left with almost 80% of its cash intact.  Then, if these patents are really this important for Android's survival, why not shed the cash and place itself way ahead of all the competition?  Furthermore, with Intel - and its also very deep pockets - as partner-in-crime, why did they not go all out for the bid? 

One interesting reason has been voiced by Bodgam Dimitru, a BlackBerry enthusiast and proud Canadian:  Google will buy Research in Motion.  Dimitru goes as far as to detail 10 'logical reasons' why this acquisition makes sense.  Perhaps the most interesting ones: 

1)  Mobile Patents:  Not only would Google get RIM's patents, it would also get Google into the Nortel patent acquisition that we have been speaking about in the above paragraphs and for much less than the full price...  

2)  QNX:  The foundation of the new BlackBerry Tablet OS and future QNX-based BlackBerry 'superphones' is literally a drop-in replacement for the Android's Linux Kernel thanks to its POSIX compliance.  Key benefits include improved stability, better security and ease of rolling out new hardware. 

3)  Enterprise:  In a world where Google owns RIM and there's a QNX kernel on Android, targeting enterprise clients becomes viable for Android. 

4)  Carrier Relationships:  RIM has done a great job over the years at expanding its footprint around the globe by building great partnerships with carriers, which would only help Google expand across all markets. 

5)  Existing Commitment to Android:  RIM has already announced support for Android apps on the BlackBerry PlayBook and future QNX-based BlackBerry smartphones, which clearly shows that Android on BlackBerry is already doable. 

Granted, none of this will happen if RIM can turn things around but, if worse comes to worse, this acquisition could open a brand new world of opportunities for both companies. 

Despite of how inconvenient, cumbersome and archaic our banking system may be, many of us might find it difficult to move it away from the long-established and respectable institutions that we 'trust' today - even if we have seen how easily some of those institutions could crumble and collapse.

However there are a number of new startups that are trying to entice users to do exactly that.  A few of them, are coming up with truly innovative approaches that may very well, capture the hearts and minds of many people and give users enough comfort and transparency to entrust these start-ups with their money.  

Three such examples, among many others, are: 

1)  Think Finance with their Elastic web-based bank account replacement that targets, as their CEO, Ken Rees puts it:  '... the underbanked and unbanked - the estimated 60 million people who are not well served by traditional banks' 

2)  Square, who is targeting the approximately 30 million small business owners in the US that don't have a merchant account or credit card terminal.  With only 6 million businesses in the US accepting credit card payments, there is a large untapped market they are ready to serve. 

3)  BankSimple, a start-up still in stealth mode who wants to offer 'banking on-line' as opposed to the traditional 'on-line banking'. 

BankSimple has not yet launched but it is already making quite a splash with over 30,000 people having signed up to be part of the beta launch and over 50,000 ready to open accounts with them as soon as the business is fully up-and-running.   

What exactly is BankSimple?  

1)  BankSimple is not a bank.  It will partner with smaller banks who will hold the federally insured accounts.   

2)  What BankSimple will do is provide an on-line interface that allows users to combine all their credit, savings, checking and termed accounts into one banking card.   

3)  They will help you manage your money with their predictive money management model (part of their secret sauce).  While users only need to concern themselves with a single account, there are actually checking, savings and credit accounts tied to that one login.  Those will function behind-the-scenes with Banksimple automatically managing funds and transferring money between the accounts to ensure that the most money is yielding the most interest at any given time. 

4)  Because their focus is mobile design and usability (the first thing the company did was design its mobile interface), it allows you to do everything with just a few thumbs movements while on the move.  For example, it will provide real-time updates on spending via the web and through Android and iOS apps; they will help combat fraud by providing instant alert on purchases and by checking if a user's location matches the location of the transaction to monitor for fraud; they will allow you to deposit a check by taking its picture with your mobile device and to make quick and easy transfers to your Facebook and Twitter friends.  And they promise Zappo's style customer service so, if you run into any problems, there will be a expert at the other end of the line to help you out. 

5)  Finally they promise no fees.  Their full revenue is based on taking a percentage of the interchange fees (these are fees that businesses pay to credit card companies to process transactions) and net interest margins. 

This sounds like true customer-centric business and operational models.  Obviously, we still need to wait for it to launch to see if they do deliver on all fronts but, at the very least, I would say they have the right idea.  Perhaps one question mark is around their banking partners.  They plan to partner with about 15 institutions.  These will have to be smaller banks with no retail presence (similar to the ING Direct model) and with no aspirations of building brand awareness since everything will be branded BankSimple.  These banks will need to integrate their systems and products with and cede full control to BankSimple.  What banks will they have as partners?  Will they be robust even if small and not well-known?  For sure they will be FDIC insured but nobody wants to test federal insurance...  I trust they will overcome this hurdle - in fact, my understanding is that they already have these partnerships in place - and be able to offer to us the great banking experience that we all deserve and very few of us get! 

We all understand that banks could be doing all this themselves but, with their focus on ROI and the use of proven technologies and methodologies, have chosen not to do it.  Will they wake up in time to avoid damaging customer migration?