Described as the “best deal ever,” by David Lawee, vice president of corporate development at Google, this year will mark the 14th anniversary of one of the best and most successful acquisitions in history, Google and Android.
Now in hindsight, it can be rightly said that the $50 million (estimated) Google paid to acquire Android had no opportunity cost. Launched in 2008, the first public version of Android was the cumulative efforts of Google and its new Android members, which is now the most popular mobile Operating Software in the world. Research at Gartner claims that of all new smartphones shipped worldwide during the first three months of 2018, 86 percent were Android-based. The situation is such that even the more established rivals back then, like Microsoft’s Windows Phone, Blackberry, and even Nokia, now stand defeated. As a matter of fact, both Nokia and Blackberry now license their brands to other companies for smartphones based on Android.
Not just in smartphones, but android is now also used in smartwatches, smart TVs, tablets, cars, and whatnot. The acquisition and then launch of Android was one of the biggest reasons why Google escalated to become one of the most influential companies in the world.
But it was only in the first half of 2013 that Android Inc., the mother of Android OS, was formed by Andy Rubin along with the other co-founders Rich Miner, Nick Sears, and Chris White. It was in Apple, where Rubin worked before, that he got his nickname “Android” by his employees seeing is love for robots, reports The Verge.
The original idea as reported by TechRadar was to create an operating system for digital cameras. However, due to the sudden shift in the demand for digital cameras to mobile phones, the creators decided to make an operating system for mobile phones. What Android now is “the exact same operating system we built for cameras,” said Rubin at an economic summit in Tokyo. But things did not go quite well for them in the beginning. To keep it going, Rubin even had to ask a fellow investor, Steve Perlman for some cash which, as it turned out, all that was needed for Android to survive the lows and bag its next deal.
While other investors thought that Ruby was trying to “boil the ocean” with his idea of creating an open-source operating system for mobile phones, Larry Page, the president of products at Google then, was surprisingly interested in his idea. Rubin was told that Google wanted to offer “help’.
In their second meeting with Google in 2005, the co-founders of Android brought to the tables, a prototype of their mobile operating system to Larry and Sergey. It must have been good enough because immediately enough, Android had an offer from Google. Considered as the official date of acquisition, Google purchased Android on July 11, 2005, and the Android team moved into the Googleplex.
Rubin was basically running a start-up inside Google. For running the operating system on a mobile, what was needed was a carrier that would sell the phone. Google signed the deal with T-Mobiles to launch the first-ever Android Phone. But it was not smooth sailing for Android.
Just as they were beginning their final touches, Apple unveiled the iPhone. Rubin and his team had to modify their existing model to create a totally different model from what they had thought of earlier. The iPhone pushed the carriers to isolate Android. Fortunately, Motorola came to the rescue. After spending $100 million for marketing, Motorola’s phone was finally released in 2009 and to a great extent, it completely marginalized iPhone.
The rest is history. $50 million seems like a small cost now that we know how quickly things escalated. Android is now one of the top platforms, successfully competing with (and defeating, though it is debatable) Apple’s iPhone.
Lawee believes that the success of an acquisition also depends on the perseverance of the team coming in. As a result, Rubin worked at Google to complete Project Android. What set this acquisition apart was the integration of all the tools and applications of Google with and within Android. This strategy not only made Android much more user-friendly and compatible but also served as a great method for Google to market its services and applications. Who would have thought that applications like Play Store, YouTube, Maps, and Gmail would be such an integral part of life someday?
With this trick (or treat), Google also imposed its law on manufacturers of Android-based smartphones. To use the services of Google Play Store, the manufacturers must have to obtain an Android Licence issued by Google, which can only be done when all the rules laid by Google are strictly complied with, including a mandatory emphasis on the applications and services developed by Google.
Since Google does not charge anything for the Operating System itself, the company sticks to its core strategy when it comes to generating revenues, that is, from mobile ads displayed on Android phones, which is now a $1 billion business for the search giant. Buying Android was like a fortunate stroke of serendipity for Google. This acquisition definitely takes a bow from every other company acquired by Google since then.