Google to Buy Motorola Mobility for $12.5 Billion

This is big news.  Google now becomes a software company that has all the ubiquity of Microsoft AND a hardware brand of its own like Apple. Microsoft’s new relationship with Nokia puts it in the meley, a three way war not just for handheld phones but for the web itself.

Behind all this is The Cloud.  Cloud based computing looks like as great an opportunity as the PC and the Internet before it.  The smart phone is an appliance that uses the Cloud the way Gillette razors use blades.Whoever controls the OS is going to sell a LOT of blades.

Google, Microsoft and Apple are not the only players. Amazon has its own piece of the cloud .. together with eBay, Seattle’s virtual megastore dominates web based retail.  If Google decided it needed Motorola to fight its war and Microsoft allied itself with Nokia, will Amazon tie up with HP’s WebOS division to make the war four sided?

Apple is the only combatant undertaking this war on its own.  For all Steve Job’s magic, he needs to comply with the ubiquity of Google and Microsoft or be swallowed up by a commodity based appliance market much as Sony has lost its lead in electronics. As Google and Amazon grow they will erode the value of iTunes.  Microsoft, for its part, has a unique opportunity to emerge from all this as the business end of the great cloud market.

The best thing about all this is the American dominance of the battlefield.  So far no other country seems able to laucnh its own campaign. Now if we could only turn this into American jobs!