Google's Acquisition of Motorola: Software, Hardware, Everywhere
Case Code: BSTR401
Case Length: 18 Pages
Pub Date: 2012
Teaching Note: Not Available
Organization: Google, Inc., Motorola Mobility Holdings, Inc.
Industry: Smartphones, Information Technology
Themes: Managing Networked Businesses, Corporate Strategy, Mergers and Acquisitions
Abstract Case Intro 1 Case Intro 2 Excerpts
Google owed its origins to a Stanford University project undertaken by two students, Larry Page and Sergey Brin, in 1996. Google's search engine was launched in 1998. At the time the prevailing search engines delivered search results based on the frequency of keyword occurrence. This often produced irrelevant results. Google, however, employed an algorithm called PageRank that ranked web pages based on the number of inbound links to them from other websites. This resulted in more relevant search results. The superior search results, combined with faster processing due to Google's generous spendingii on hardware infrastructure like data centers and servers, resulted in Google achieving the leadership position in the search segment.
By 2006, Google had captured a share of 43.7% of the US online search market. Google filed for an IPO in April 2004 and subsequently went public in August 2004. The company followed a dual share structure. Google's IPO comprised only subscription to Class A shares, each of which enjoyed a single vote. Google's founders, venture capitalists, and other insiders were separately allotted Class B shares which were entitled to 10 votes per share. Google's founders justified this share structure on the grounds that it would help them execute the long-term plan that they had chalked out for the company without being hindered by the immediate financial demands...
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