It has been three months since Google Inc. (NASDAQ:GOOG) bought Motorola Mobility for $12.5 billion, and Google stock surged Monday after the announcement that the company was laying off 4,000 Motorola Mobility workers – about 20 percent of its workforce – and shuttering about a third of its production facilities. What does this mean or Motorola Mobility, which has been unprofitable for most of the last four years, and for Google, which is one of the world’s most profitable and recognizable technology brands?
According to some perspectives: Discipline. Quality over quantity. Innovation. Most indications are that Google Inc. (NASDAQ:GOOG), rather than sell off pieces, is making Motorola Mobility leaner and meaner, with a focus on developing better hardware for use with the Android operating system. Motorola, after all, is the first company to come up with the cellphone. Motorola Mobility is building a team around Regina Dugan, who is considered a star in technological advancements – having challenged scientists at one point to create a functional lithium-ion battery that is smaller than a grain of sand.
While Google Inc. (NASDAQ:GOOG) has a hardware company under its direction with Motorola Mobility, the company has insisted hat will still work with partners like Samsung, because the focus will be on selling the best, most innovative phones – no matter what company creates them. While Samsung is worried about its relationship with the Android operating system, Google is clearly trying to establish some competition, if not create an Apple-like self-sufficient ecosystem, where all software and hardware are under one umbrella and there is no need for partners.
Whether Google Inc. (NASDAQ:GOOG) has the braintrust to turn Motorola Mobility into a competitive smartphone brand once again is something that may not be known until after the holiday shopping season, but these layouffs seem to indicate that Google is serious about its investment and wants to do what is necessary to make Motorola every bit a profitable member of the family as its parent, Google. For sure, the transition of Motorola Mobility under the Google name will be watched closely by many hedge funds, including Ken Fisher’s Fisher Asset Management, which had a $456 million position in Google at the end of March (see where it stands in this multi-billion-dollar portfolio).