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Brick and Mortar Is Dead! Long Live Brick and Mortar!

David ByrdIn the late 90s it was popular to refer to physical stores as brick and mortar.” Furthermore, those companies that had physical presences were the future dinosaurs of our economy. The era of the Internet and IP communications was beginning and it would be unstoppable as the choice for consumer purchases. Therefore, it is a little bit ironic when the greatest known virtual presence on the planet decides to purchase a brick and mortar” asset. Googles acquisition of Motorola Mobility has been defined as defensive in its conflict with Apple, Microsoft and Oracle. Perhaps thats true and worth spending $12.5 billion for nearly 20,000 patents, but that would mean Google would need to spin off the physical assets at a potential loss.

Motorola Mobility is a declining brand with running-in-the-pack products. Yet the purchase gives Google the opportunity to compete in the physical world backed by an incredible virtual presence. In the late 90s I consulted with the CIO of a global company with hundreds of stores but no online presence. He was seeing new entrants on the Web and was concerned with how to defend his business. At the time, I insisted that the physical properties would continue to be valuable but he needed to establish an eCommerce presence quickly. In preparation for the Christmas season, the company built an eCommerce website and closed many of their stores. Over time they learned to integrate the website and the stores business processes and selling strategies. Buy online, pick up at the store, or buy online and return items to the store. It worked. Today, they have an incredible online presence and are building new stores again.

So, what is Googles intent? Do they want to sell off the various components of the business and keep the patents? Surely, it is tempting Google to see if they can make better phones or tablets than Apple. And with RIM on the ropes and nothing exciting from Nokia on the horizon, there is room for a new entrant. It could be quite timely for Google to add brick and mortar” to its business strategy considering the management team should be able to execute it better than the AOL acquisition of Time Warner.

If this purchase is simply to acquire patents, then it is an expensive acquisition with a complicated ROI. Consider the value for a similar quantity of the Nortel patents at $4.6 billion now owned by Apple, Microsoft, RIM, EMC, Ericsson, and Sony (the Rock stars), most of whom are competitors to Motorola Mobility. The patents are valuable because they generate income on a transactional or annual cash basis raising the specter of the creation of a technology toll business. A tit for tat retaliatory pricing or licensing confrontation would be bad for consumers, businesses and service providers. Broadvox and other service providers make use of many of these patents everyday in our network infrastructure and service offerings. Uncertainty in business is never encouraging.

Interest in What Would Google Do?” continues to develop.

David Byrd is vice president of marketing and sales for

Broadvox,

and is responsible for marketing and channel sales programs to SMBs, enterprises and carriers as well as defining the product offering. Prior to joining Broadvox, David was the vice president of Channels and Alliances for Eftia and Telcordia. As director of eBusiness Development with i2 Technologies, he developed major partnerships with many of the leaders in Internet eCommerce and supply chain management. As CEO of Planet Hollywood Online he was a pioneer in using early Internet technologies to build a branded entertainment and eCommerce website company partnered with Planet Hollywood. Having over 20 years of telecom sales and marketing experience, he has held executive positions with Hewlett-Packard, Sprint and Ericsson.


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