Behind the Scenes: Amazon and Apple are Kicking Google’s Ass
Google’s (NASDAQ:GOOG) investigation of its proposed acquisition of Motorola (NYSE:MMI) is expected to come to a close in China, with regulators revealing their ruling on the deal soon. The deal has already been approved in the U.S. and Europe.
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Google’s acquisition of Motorola was considered by the tech industry to be a play for Motorola’s mobile patents. However, the search giant has more than patents by taking control of one of its own Android hardware partners. According to a research firm, Google’s direct control over Android hardware will help the company assert its dominance in the tablet market, while also improving its revenue stream on mobile search.
Goldman Sachs (NYSE:GS) said that the Motorola deal would be crucial for Google to battle both Apple’s (NASDAQ:AAPL) iPad as well as Amazon’s (NASDAQ:AMZN) Kindle Fire tablet. Even though the Kindle Fire is built upon the Android platform, Google does not profit from the device because Amazon has created ts own browser and app store specific to the device.
Not only is Amazon proving to be worthy competitor, but Apple has made it difficult for Google to bring in revenue as well. The search giant actually pays Apple for the privilege of being the default search engine on the iPad, which offsets Google’s revenue from ads on Apple’s tablet.
Even though mobile search volume is up, it costs Google too much — more than on the desktop — to acquire mobile search and ad revenue. Goldman Sachs asserts that in order to reduce this expense and boost net revenues in mobile, Google has to sell more Android tablets by appealing to consumers. The Motorola deal will certainly help Google develop the tablets. Google could even take advantage of Motorola’s LapDock hardware that uses an Android handset to power a notebook-like shell. Google could also use Android or the Chrome OS for such a device instead of a Motorola’s software.