Google-Motorola Deal Hits Chinese SpeedBump

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Now that the Google acquisition of Motorola deal has passed through the fires of the European Union regulatory board, and the U.S. Department of Justice, you might think it would be smooth sailing until the finalized deal. However, the deal has hit a surprising pothole that could slow it down, and that is the Chinese Anti-Monopoly Bureau. As it turns out, this is "a routine part of the procedure for companies that make more than 400 million yuan ($63 million) in China and 10 billion yuan ($1.6 billion) globally."

There is speculation that China may use this as an opportunity to pressure Google into bringing back their search business to Mainland China. If you will remember your not to distant history, way back in 2010, Google moved its operations from the Chinese Mainland to Hong Kong in the wake of allegations of hacking by the Chinese government. Still, this news is not all doom and gloom, and in fact could be a huge opportunity for Google to rebuild a better relationship with the mainland Chinese government. Lest we forget, Android devices are selling like crazy in China right now. (In fact, recently market analysis puts Android OS for smartphones marketshare in China at 60%). However, Google is currently not benefiting effectively from that growth because just about ever manufacturer, carrier, and internet portal are creating "forked" versions of the OS, including third-party app stores & other services that leave Google out of the loop.

Ultimately, this minor hiccup will likely not slow things down too much, as China has until March 20th to either allow the deal or push for another step in the review process. The Speculation is that the Chinese government will not make any harsh decision to put a halt on the deal as there is too much at stake for them as well. Also, there has been some intel that Google has already been slowly rebuilding some of its business in Mainland China by hiring in the country again. They are supposedly "picking up engineers, sales people and product managers, as well as launching new services this year." Here's a quote from the TechCrunch article with some final details:

However Google’s negotiations go, it seems unlikely China will seek to halt the deal altogether. Edward Yu of Analysys International, speaking to Reuters, said that if China does object, the deal will fall apart. But with China gearing up to replace its party leadership, he said: “I don’t think there will be anything extreme” on the cards in terms of decision-making.

Source: TechCrunch