Will Motorola Spur a $12.5 Billion Loss for Google?

That's the question everyone is asking this week. The majority of analysts seemed to think that it was a patent play – by acquiring Motorola MMI, Google GOOG would gain access to a whole world of patents. These patents could then be used to strengthen its venture in smartphone development. They could be used to defend Google in the event of another lawsuit. They could even be used to sue other tech companies and extrapolate billions of dollars in additional revenue. The possibilities are nearly endless, and that's why the buyout was considered to be a decent – if not spectacular – idea. There were a number of commentators that believed Google wanted to buy Motorola as a way of breaking into TV cable boxes. But many cable industry experts insisted this wouldn't be possible. If Google attempted to place its technology into every Motorola cable box, cable providers could simply go with a competing product to avoid a clash with Google. More recently, Google revealed that it intends to develop a serious competitor for the iPad 3. While some speculated that this device would be a redesigned or rebranded tablet from Samsung, others thought that Google might have wanted Motorola to take advantage of its design expertise. One thing analysts did not believe, however, is that Google would stay in the manufacturing business. Though it has proven to be an enormously profitable venture for Apple (a company that makes the vast majority of its profits selling hardware, not software), Google is an analytics company. It doesn't know anything about manufacturing tech devices. Thus, if the company stayed in the manufacturing biz, it would run the risk of losing billions of dollars – or so the critics believed. Personally, I wanted to see what would happen if Google tackled manufacturing with the same determination that it tackles everything else. But the world may never know. One thing we do know, however, is that traders and analysts can't seem to understand why Google failed to take a wait-and-see approach to Motorola. Earlier today, the smartphone maker announced its preliminary results for the fourth quarter, with sales of $3.4 billion vs. $3.88 billion estimates. Investors haven't responded too negatively since the Google deal has already been made. But it has made them wonder: what was Google thinking? Did the search engine giant make a terrible mistake? From a cost perspective, yes – Google did make a mistake. Seeing as how Motorola's sales are on the decline (even though consumer interest is on the rise), Google could have waited six to eight months and acquired Motorola for less. In terms of manufacturing, Google may have gotten a bad deal as well. While the company could still decide to use Motorola's facilities to produce its own electronics, that does not appear to be the likely outcome. Thus, Google will be forced to sell the facilities to an industry that doesn't want or need them, which could ultimately lead to a reduced selling price. This may not be considered a loss (if it's dead weight to Google, any offer is better than nothing). But it's unlikely to be a source of profit. Truth be told, it could be several years before Google sees any benefits from the Motorola buyout. But I suspect that Google knew this going in. It is, after all, an analytics company. It wouldn't pour billions of dollars into an acquisition without having a game plan. That, however, is part of the reason why traders are concerned: what is Google's game plan? The company has yet to make a formal announcement. For better or worse, we probably won't know much more about Google's Motorola initiative until 2013. When it comes to major (read: key) acquisitions, Google likes to take its time re-shaping each company to suit its needs. That's why we didn't hear much about Android when it was first acquired. And that's why YouTube didn't begin to feel like a Google property until roughly 2008 – two years after the acquisition was announced. What can we expect from Motorola going forward? I suspect that whatever Google has planned, its initial developments will be relatively low-key, and slowly build to something greater. How great, exactly? That, unfortunately, remains to be seen. Follow me @LouisBedigian