At first glance, Dennis Woodside, the Google executive who was named Motorola Mobility's CEO on Tuesday, has a resume that doesn't quite jibe with his new gig.
Woodside has never worked on a hardware project, and he's never held a job in the consumer electronics or mobile industries. He's never been an engineer, a designer, a supply channel manager, or even a telecommunications wonk.
Rather, Woodside is a former mergers and acquisition lawyer who has overseen multibillion-dollar revenue growth in Google's businesses, particularly on the advertising side, in more than 30 countries. So what value could a lawyer and advertising executive -- albeit a good one -- bring to the helm of one of the world's most storied cellphone manufacturers?
"Woodside was able to grow overseas revenue for Google. He knows how to integrate companies with his mergers and acquisitions background, and he understands Google's ad business, and knows how to launch ad products," Kim Forrest, a senior equity research analyst at Fort Pitt Capital Group, told Wired. "I'm not buying the idea that Google wants to be an Apple 'mini me' and make its own phones. And this is about more than patents, too. Google needs to figure out how to make money selling ads on mobile devices, and this guy just might be the guy to do it."
Woodside as Mobile Ad Code-Cracker
Forrest and other analysts who closely follow the mobile industry say that Woodside's appointment to run Motorola Mobility is likely a play by Google to finally crack the mobile ad market -- a goal that has so far eluded not only Google, but also Apple, Facebook, Microsoft and other rivals.
"The majority of the money Google makes right now on the mobile side is from online search and a good chunk of that still comes from the iPhone," said John Jackson, the vice president of research at the analyst firm CCS Insight. "Android has not been a significant money maker for Google, either directly or indirectly. While Android is a platform, for Google, AdWords is still the platform because Google has not been able to monetize Android in a way that is satisfactory."
Most recently, Woodside oversaw Google's sales and operations in North and South America, a job he held for two years. As Google's Americas president, Woodside's team "drove revenue from $10.8 billion to $17.5 billion in under three years," Motorola said when announcing its new CEO. Before that, Woodside led business development and new ad product launches in more than 30 countries.
Woodside joined Google in 2003 after working as a consultant at the firm McKinsey & Company. Before that, the Stanford Law School alum was an M&A lawyer at the Los Angeles-based firm Munger, Tolles & Olson. He also has an industrial relations bachelors from Cornell.
After Apple CEO Tim Cook reportedly attempted to hire Woodside away from Google, the lawyer was tasked with overseeing Google's takeover of Motorola. The purchase, at $12.5 billion, is by far Google's most expensive acquisition to date, and could help define Larry Page's legacy at the search company he co-founded.
Now Woodside finds himself running Motorola in what is not only his biggest challenge yet, but also Google's most expensive gamble.
"The biggest disappointment for any smartphone and tablet maker today has to be that they aren't able to sell mobile ad space in a meaningful way yet," Forrest said. "This is likely less about managing the supply chain -- Motorola probably has people who can do that -- and more about directing how to finally crack the mobile ad space open."
Indeed, Motorola already employs people who know how to build and design competitive hardware. But what the company didn't have, until Woodside, and what no other hardware maker has at this point, is an in-depth understanding of the online ad business, Forrest said. Woodside has that understanding, and Google is the world's largest seller of online ads, Forrest notes.
"The smartphone market isn't a knock down, drag out, 'My phone is faster than your phone' kind of thing," Forrest said. "People don't buy phones based on hardware alone. This market could be won by whomever can finally get those mythical local dollars to flow through the mobile phone."
Woodside as Ecosystem Relationship Builder
But Woodside's value to Motorola (and thus Google) might extend far beyond cracking the code of mobile advertising. His experience in M&A -- getting disparate groups to work with each other, identifying both redundancies and strengths -- could pay dividends too. Now that Google owns Motorola, it has a unique opportunity to rally members of the Android ecosystem into a unified machine working toward common goals -- whether that's building better, more profitable hardware or selling ads on phones and tablets.
"If you look across the base of Android licensees, you see a bunch of sick guys, and the majority are paying fees to Microsoft after losing patent disputes," Jackson said. "They're not happy. This isn't a healthy situation. And then you see Samsung, which is doing quite well, but sees itself as a platform player, open to taking on other operating systems that could try to challenge Google someday."
If Woodside were to use Motorola Mobility as an innovations center -- sharing advancements in power efficiency, display technologies, and integrating hardware with Android software -- it could help provide a boost to Google's partners, Jackson said. While it remains to be seen whether Google will share its Motorola expertise with other Android licensees, the company has already publicly said that research and development will be a focus under Google ownership. To this extent, we might see Google spend some capital on building Android reference devices in the same manner of Intel and Nvidia.
Regina Dugan, who ran the Defense Advanced Research Projects Agency before joining Google, will head up a new R&D division of Motorola Mobility dubbed ATAP, or the Advanced Technology and Projects Group.
Google's rumored plan of expanding its Nexus program to as many as five hardware partners could also help rejuvenate the fortunes of those challenging Apple and Samsung.
"This might be a good position for [Woodside], at least in the short term, since Google is integrating Motorola into its company as quickly as possible and they're all still trying to figure out how Motorola will work alongside Samsung, alongside HTC and other hardware partners," Carolina Milanesi, a mobile analyst at Gartner, told Wired.
While Google, its Android licensees, and its rivals are trying to figure out how to make money selling ads on mobile devices, each is taking a different approach toward finding a solution, Jackson said. While it's unclear how Google/Motorola synergy might go about solving that problem, finding a solution would help strengthen the overall business fortunes of Google and its hardware partners -- one more reason for Google buy Motorola other than simply spend it on just patents, CCS Insight's Jackson said.
"Serendipitously enough, this happens in a week when Facebook's IPO has flopped," Jackson said of Woodside's appointment as Motorola CEO. "One of the principal risk factors that was talked about among the analyst community for Facebook was its admission that it has so far been unable to monetize on the mobile side. Facebook's working on it. Apple is working on it. Everyone is. And Google knows it needs to figure this out before somebody like Facebook comes and does it for them."
