By Luanne Teoh on 08-16-2011

The recent acquisition of Motorola Mobility by Google for $12.5 billion set off a wave of media frenzy worldwide and sent tech and wireless stocks market prices ticking upwards. Two years ago in 2009, Android’s chief, Andy Rubin said “we’re not making Android hardware”. In the interview with Cnet, Rubin also scoffed at the notion that the company would “compete with its customers” by releasing its own phone and said “we’re not making hardware, we’re enabling other people to build hardware.”

Yesterday’s move showed a 180 degree turnaround from that statement. Instead of making phones themselves, Google will just purchase a hardware manufacturer. And according to Android chief Andy Rubin, “Google is not going to be giving Motorola favorable treatment. It will be a separate division and it will have to fight for Google’s business like everyone else.” — Right. Point noted once again, now from the opposite stance instead.

The statement by Rubin is a hard one to swallow — After spending $12.5 billion, how can it not be in the best interest for Google to ensure that Motorola not just survive but thrive? Plus, Google has essentially added 19,000 new headcount to its payroll. Google’s own staff numbered around 29,000. With the Motorola purchase, Google just increased its own size by 60%. So, saying that Motorola will have to fight for Google’s business just like the rest of the pack is totally unrealistic on so many levels.

This move also proves interesting because:

1) Google will be competing with its own largest partners and customers — HTC and Samsung.

The very reasons which made Android successful — the hardware makers who bet almost all their chips on Android now has to compete with the owner of the OS in the hardware space. HTC is already struggling with the lack of intellectual property ownership. It now has another new problem to deal with.

2) Culture – “Though Google has grown a lot since it founded in 1998, we still maintain a small company feel.”

Those words are clearly written on the front of its culture page. With its well-publicized and unconventional office culture that has been the cornerstone of its success, it will be interesting to see how Google maintains its small company feel with 48,000 staff members.

This was undoubtedly a bold move by Google that raises some key questions. Then again, disruptive is often the goal when it comes to technology and innovation. With Android as the OS market leader and the Motorola deal complete, Google only needs to set its sights on buying out a mobile service provider — This move will then complete its domination of the entire mobile ecosystem.

Google logo courtesy of Slashgear

About Luanne Teoh

Luanne is a senior correspondent for BizTechDay focused on Small Business Tech, Mobile and China based in San Francisco. In the last 17 years, she has helped launch start-ups and turned around failing operations. Her international work experience include both public and private corporations in Southeast Asia, Australia and North America. She has previously worked for Oracle Corporation, SonyBMG Music, Universal Music, Catcha Media and SOH Inc. Apart from a keen interest in technology, Luanne is also and avid explorer of the globe, cultures and people.

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