[General Topics] chester04:
Yes, yes, technically the Google-Motorola deal still isn’t final. In other words, anything could still go wrong and Motorola may just back out of the big deal of the moment.

But for now, we’re still all delirious about how Google has announced its near-definite purchase of Motorola Mobility, makers of such landmark phones as the RAZR of yesteryear and the Droid series.

And yet Google is not a hardware firm, while Motorola Mobility (let’s just call them Motorola for simplicity) is all about the hardware. So pundits have been abuzz about how Moto may not be a good fit for the Google ad-based ecosystem, or how its presence in Google’s arsenal could actually be a liability when dealing with other phone makers.

Well, here’s what I think: I think it can work… but Google will have to break up Motorola.

The way I see it, Motorola has four core sources of value:

•The patent portfolio, which has been Google’s target all along

•Manufacturing capabilities

•People and talents

•The brand legacy

Google needs two of these cores and can do without the other two. Can you guess which ones?

Yup. Patents. And people.

Therefore, if I were Google CEO Larry Page, here’s what I’ll do after the acquisition process has been completed:

•Move the patent portfolio from Motorola’s assets into Google’s assets – yup, let Google own them directly

•Reorganize Motorola so that Google gets to pluck some of their more brilliant groups and talents. Larry Dignan of ZDNet says there’s gold in Motorola’s enterprise sales team. I’d go further and say take them out and create a separate Google-Moto enterprise SWAT team to help bundle the entire Google experience

•Spin off Motorola into a fully-owned but autonomous design and manufacturing operation, with a Google-appointed board of directors… and with no patents of its own for now

As a Google-owned corporation, Motorola benefits from getting cheap (or free) use of the patent portfolio which it developed in the first place. And they still get to do their own thing like before… except now they have to do Android the way Google wants them to do Android. Bonus: no cash flow worries.

And with Motorola being a separate entity, partners like Samsung and HTC will have peace of mind.

Extreme case: Google strips all patents out of Motorola, and then SELLS Motorola off again since it doesn’t have any use for a hardware firm.

Google, meanwhile, will find itself in the pleasant situation of becoming a patent repository. They will realize that a patent is, after all, information… and hey, they’re in the information business, right?

So this may lead to a potentially new business model. Right now, they have Google Patents, and it serves only as a helpful but non-revenue-generating search engine. But what if it could become a revenue-generating search business too?

What if businesses search for patents that they need and, right next to the results entries, they can click on a rights purchase plan that they can take right there and then? Google then becomes the financial intermediary between inventors and commercial developers… and they get a royalty cut per unit sold.

In the scheme of things, 17,000 patents isn’t that much, but it’s a start. Google can now start commercializing these patents and putting price tags on them, available to whoever wishes to get them. And maybe pricier if you happen to be Microsoft or Apple.

Far out? I don’t think so. It may not happen exactly this way, but I think something like it is inevitable in the future.