Microsoft Is Biggest Winner in Google-Motorola Deal

And shareholders on both sides probably the biggest losers.

Someone, somewhere in Microsoft HQ in Redmond must have uttered a maniacal, guttural laugh on learning the news that Google wanted to acquire Motorola Mobility for $12.5 billion. The deal has now been closed and effectively makes Google a hardware & device manufacturer.

Announced back in August 2011, the move shocked the mobile arena and caused many to question Google's commitment to the relatively open nature of Android. Motorola would still be running as a separate business and would remain an Android licensee but those calming statements didn't prevent Google's market capitalisation from falling by $5 billion on that fateful day.

It is worth looking closely at the blog post written by Larry Page, the CEO of Google, announcing the completion of the acquisition. There's no mention of Android as an ecosystem. The quintessence of the post can be resumed in a few words; Motorola will make better mobile devices and will bring more money to Google. Hardly something partners will be happy to hear.

The reason why Microsoft should be smirking is that Windows Phone has become defacto the only real and credible alternative mobile platform to Google's Android. And the way Google pimped up the Motorola acquisition could encourage Open Handset Alliance handset manufacturers (all the 22 of them at the time of writing) to consider Microsoft Windows Phone as a mobile ecosystem.

Even if Microsoft has struck a strategic partnership with Nokia, I do not believe that the former will give any special preferences to the latter, especially as Microsoft is trying to raise the profile of Windows Phone (which according to analyst firm NetMarketShare has a smaller footprint than Amazon's Kindle) and cannot afford to leave any potential partners out, however small they may be.

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