Did Microsoft Trick Google Into Buying Motorola?

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The media has been abuzz all week with news and analysis of the Google-Motorola deal. When all of the dust settles on the business logic behind the deal, or its impact on pending Android patent infringement, or what it means for the future of Google TV, the company that gains the most from this new relationship may just be Microsoft.

Microsoft was engaged in talks to acquire Motorola Mobility before Google swooped in. There is some speculation floating around that Microsoft may attempt to outbid Google for Motorola. Those rumors are highly unlikely unless Microsoft did it just as a game of financial chicken to force Google to up its bid and waste even more money on the Motorola deal.

The biggest winner from the Google-Motrola deal might be Microsoft's Windows Phone 7.
There is also a conspiracy theory that Microsoft was never really interested in purchasing Motorola, and that the negotiations were a strategic move from the outset. Essentially, the theory claims that Microsoft only courted Motorola to lure Google into rashly snatching the company up just to keep it (and the sizeable patent portfolio) out of Microsoft's hands--and that Microsoft and Windows Phone 7 ultimately benefit from that alliance.

This theory has more credibility. Whether or not Microsoft's interest in Motorola was purely some insidious business strategy, the fact is that Microsoft is aggressively looking to take advantage of the alienation that other Android partners like Samsung, HTC, and LG might feel now that Google has its own smartphone and tablet manufacturing arm that competes directly with them.

Andy Lees, President of the Windows Phone division at Microsoft, said in a prepared statement, "Investing in a broad and truly open mobile ecosystem is important for the industry and consumers alike, and Windows Phone is now the only platform that does so with equal opportunity for all partners."

iOS is iOS. It is as closed as it always has been, and probably always will be, so there is no opportunity there for third-party partners. RIM also isn't looking for third-party BlackBerry partners, and that ship is sinking anyway. Android is "open" in some sort of bastardized sense of "open" that only makes sense to Google, and now Android partners have to contend with the fact that one of the main competitors in the market is Google itself. Then, you have Windows Phone 7, which can be freely licensed and doesn't have the mobile OS developer itself as a rival.

Or does it? Getting in bed with Microsoft and Windows Phone 7 has its own red flag. Microsoft may not own a smartphone manufacturer or compete directly in the market per se, but its alliance with Nokia is about as close as you can get with consummating the relationship. Microsoft has invested heavily in Nokia, and in return Nokia has essentially become Microsoft's Windows Phone 7 hardware arm--just without all of the financial and legal hurdles involved in making such a relationship official.

Where the rubber meets the road, there may be very little difference between Google-Motorola and Microsoft-Nokia from the vantage point of Samsung or HTC. However, Microsoft may still represent the better deal between the two.

As patent licensing fees and legal bills stack up, the cost of the "free" Android OS is quickly skyrocketing. Windows Phone 7 has licensing fees, but one of the perks of paying those licensing fees is that Microsoft also backs up its OS and guarantees that it is free from patent infringement issues. If any such challenge should arise, Microsoft will defend Windows Phone 7 rather than leaving the third-party partner to fend for itself.

Whether it was intentional or not, there is a good chance that Windows Phone 7 could be the biggest winner in the Google-Motorola deal.

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