Google Buys Moto, Gives Microsoft an Opening (GOOG, MMI, AAPL, RIMM, NOK, MSFT)

Honestly, isn’t it time for Google Inc. (NASDAQ: GOOG) to stop using words like ‘supercharge’ when it spends $12.5 billion? Google isn’t a graduate-student garage start-up any longer. The company announced this morning that it has entered a definitive agreement to buy Motorola Mobility Holdings Inc. (NYSE: MMI) for $40/share in cash, a premium of 63% to Friday’s closing price on Motorola Mobility’s shares.

According to the press release, Google intends to run the handset maker as a stand-alone business that will “remain a licensee of Android and Android will remain open.” While Android has rapidly been gaining market share, Motorola’s handset business has been just as rapidly losing share.

The iPhone from Apple Inc. (NASDAQ: AAPL) and its iPhone grabbed 21% of the smartphone hardware market in the second quarter of 2011, compared with just 5% for Motorola Mobility. Research in Motion Ltd. (NASDAQ: RIMM) captured 14%, while Samsung and HTC Corp., both Android licensees, combined for 34% share. Nokia Corp. (NYSE: NOK) gets 13%, even as the company preps new models running the latest Windows Phone operating system from Microsoft Corp. (NASDAQ: MSFT).

Google’s move is likely to cause consternation among its Android licensees. Historically, when a software maker swallows up a hardware vendor, the temptation to put a little more effort and capability into the newly-acquired hardware is hard to resist. This makes licensees mad and they make a terrible fuss. Unfortunately, there isn’t a lot they can do about it but switch platforms.

This is an opportunity for Microsoft. You can almost hear Steve Ballmer already: “Microsoft has no interest in smartphone hardware. We’ll never pull the rug out from under our partners like those crazy guys at Google just did.” Maybe not exactly like that, but you get the idea.

For Samsung and HTC, switching would be neither cheap nor easy, but Microsoft has a big pile of money to help with the not-cheap part. Part of Nokia’s deal with Microsoft includes big dollars for marketing support. For a lot less than the $8.5 billion that Microsoft paid for Skype, the Windows-maker can toss a large wrench into Google’s latest move.

Buying Motorola’s handset business could turn out to be a brilliant move for Google, but waking up Microsoft should have been the last thing the Googlers wanted to do.

Paul Ausick