Google’s Q1: What Search Giant Plans For $12.5 Billion Acquired Motorola Mobility?

Posted on Apr 12 2012 - 10:37am by Editorial Staff

With Google to release its quarter earnings report today, things are mugging up that what’s the company plans for Motorola Mobility – the entity that it acquires for $12.5 billion. The company is expected to report first quarter earnings of $9.65 a share on revenue of $8.15 billion excluding traffic acquisition costs. The executives were mugged up with questions about an 8% decline in prices paid by advertisers during the time a user clicked on their ads. The earnings come at a time when Google shares have been somewhat range-bound, trading in a 100-point range between about $660 and $560 over the past six months with the last closed at $635.

Piper Jaffray analyst Gene Munster outlined the Motorola Mobility issues. He said (via ZDNet):

Given that investor focus has been on the impact of Motorola on margins, we believe that if Google were to outline an operational/financial roadmap for the acquisition, it would likely have a positive impact on Google shares. However, we believe once investors move past the impact to margins, the true concern may be fundamentals at Motorola. We note that Apple and Samsung have emerged as the clear leaders as smartphone providers. The pair provided 46 percent of all smartphone sales in Q411, up from 38% in Q3. Motorola’s smartphone market share decreased from 4% to 3% in the same period. If Google is serious about keeping Motorola as a part of its business, we believe the company must address the issue that Motorola does not seem to make devices that consumers want.

Yesterday The Wall Street Journal columnist Dennis Berman says that rumors are roaming all around in Asia that Google has already offered to sell it’s yet to cleared and completely acquired business to Huawei for a high price. There is not exact confirmation that confirms that rumors are true but it is quite possible even Google has some good worthy plans to bring Motorola back to where it actually stands.

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