Google Inc., the world’s largest Internet search company, purchased Motorola Mobility Holdings Inc. for a whopping $12.5 billion earlier this year. Experts say as the search giant enters the handset business by acquiring Motorola, Microsoft will have a lot to gain from it.

Google and Apple have taken over majority of the smart phone market. Google acted as a catalyst to boost Android’s rise by providing the software free to almost 40 hardware makers. However, the strategy to expand business could have negative effects on Google’s business relations with its Android using partners.  Many handset makers are insecure about Google’s future plans. “Google is no longer just a partner; they’re also a competitor because they’ve entered the smart-phone handset business,” says Neil Mawston, the director of London-based Strategy Analytics’ global wireless practice. They fear that Google might be biased towards Motorola and could abandon them in the future.

This has also raised speculations about other potential take overs. Since RIM is busy dealing with its own internal issues, analysts see Microsoft as a potential buyer. Since the deal was finalized, Google has gone down almost 2 per cent. The deal makes Windows phones an attractive platform, and hence, Google would have to face many challenges to remain competitive.

Source : SEARCH PROQUEST