Google owns Motorola Mobility. Now what?
BY SANDRA GUY Business Reporter email@example.com May 22, 2012 9:48AM
The Motorola plant located at 600 N. Highway 45 in Libertyville. | Thomas Delany Jr.~ Sun-Times Media
Jha’s big payoff
Motorola Mobility’s former CEO Sanjay Jha, who was hired in August 2008 to turn around the ailing cellphone maker, stands to enjoy a $66 million payout for helping oversee the $12.5 billion Google-Motorola Mobility deal. In 2008, Jha was the only CEO in the nation to receive total pay, at least on paper, greater than $100 million, receiving a total of $104 million. Jha, who never moved here from San Diego, saw his total compensation in 2011 more than triple from the prior year, to $47.15 million, regulatory filings show.
Updated: July 2, 2012 9:24AM
Now that Google owns Motorola Mobility, the question is whether the search-engine giant will profit from both the cellphone pioneer’s crucial patents and its engineering and manufacturing prowess.
The long-awaited $12.5 billion takeover of Motorola Mobility closed Tuesday, leaving 2,800 employees in Libertyville awaiting their fate under new CEO Dennis Woodside and his leadership team.
Once China approved the acquisition Saturday, three months after regulators in the U.S. and Europe had cleared the deal, the takeover closing was quick. Mobility’s stock stopped trading shortly after the deal’s completion, its board of directors voluntarily resigned and its stockholders’ meeting scheduled for June 4 was canceled. In November, Mobility stockholders had overwhelmingly approved the purchase for $40 a share in cash, a 60 percent premium based on Motorola’s trading value when the offer was first made in August 2011.
Woodside, 43, was president of Google’s Americas region. He will share his time between Libertyville and Google’s headquarters at Sunnyvale, Calif.
Experts say Google must now deal with taking on so many new employees with a different culture than the 33,000 people already working at Google.
While some experts have said Google was only after Mobility’s patents, Gartner analyst Carolina Milanesi said the smartphone maker could play any or all of at least three roles:
† Become Google’s manufacturer of the Nexus smartphone or tablet and, by doing so, set a standard for Google’s other phone makers to follow in terms of Nexus design and specifications.
† Make mass-market smartphones that sell for roughly $50 to $100 with a contract at retail stores in emerging markets such as the Asian-Pacific and Latin American regions, expanding Google’s share of that market.
† Manufacture smartphones designed for workers to take to their offices, a growing trend in which employees use their own digital devices rather than one given them by their employer.
“If Motorola Mobility becomes the benchmark maker of the Nexus smartphone, that means design and engineering jobs that could remain in the United States,” Milanesi said.
Speculation continues on how many jobs Google will cut. Google laid off 300 people after it acquired online advertising service DoubleClick Inc. in 2008. If Google cut a similar 30 percent of Motorola Mobility’s roughly 19,000 employees worldwide, it would total 5,000 to 5,700 job losses.
Local technology insiders and officials said they had no new information on local jobs, and a Mobility spokeswoman had no update, either.
Gov. Pat Quinn said in a statement that Mobility’s agreement remains in effect to keep at least 2,500 jobs at its Libertyville headquarters in return for $100 million in state tax credits over 10 years. Any changes would have to be approved by the state, he said.
“We remain in close contact with Motorola Mobility and Google,” he said.
Google’s acquisition of Mobility was first announced in August 2011, less than eight months after Motorola split into two companies — Mobility and Solutions — and just three months after the state’s tax-credit agreement.
In a statement, Woodside said, “Our aim is simple: to focus Motorola Mobility’s remarkable talent on fewer, bigger bets, and create wonderful devices that are used by people around the world.”
Macquarie Securities analyst Benjamin Schachter believes Google is particularly interested in developing a snazzier tablet computer powered by its Android software to compete against Apple’s iPad and Amazon.com Inc.’s Kindle Fire.