-- Posted Tuesday, 16 August 2011 | | Disqus

Rick’s Picks

Tuesday, August 16, 2011

“Phenomenally accurate forecasts”

We wish Google all possible success in taking on playground bullies Apple and Microsoft in a battle that has crucial implications for the use of patents to stifle competition. Google’s $12.5 billion purchase of cell phone maker Motorola Mobility, its largest acquisition to date, is a shot across the bow of more established competitors who would seek to throttle the search engine giant’s cell phone development and other promising technologies by suing them to death in patent court.  The Wall Street Journal recently detailed how high tech companies have been acquiring every patent they can get their hands on so that they stand a better chance of being predator rather than prey in patent litigation. Lawsuits over patents have become so ubiquitous that they are beginning to supersede innovation itself as the primary means through which high tech companies grow and prosper. In this respect, Google is the new kid on the block in head-to-head competition with firms like Microsoft and Apple that have been around since the 1980s.  As a relative newcomer to the technology scene, the company’s war-chest of patents was practically empty until recently.

To play catch-up, Google has been on a tear acquiring patents directly or buying patent-rich firms outright, such as cell phone pioneer Motorola.  In late July, Google bought about a thousand pending and issued patents from IBM to build up its patent ammo. Many of these patents have little to do with the company’s core businesses of search and advertising. One reportedly covers ways of automatically adjusting a clock, and another deals with surface treatments for electrical contacts. In the hands of a company as innovative and aggressive as Google, every little patent helps to thwart other firms that would seek to stifle them. “As things stand today, one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services,” blogged Google’s general counsel, Kurt Walker, in April.

Microsoft Like GM

Although we wouldn’t be shocked if at some future date Google itself becomes a vexatious litigant in patent court, we are rooting for the company nonetheless because its product track-record suggests the firm is far more innovative than, in particular, Microsoft.  For its size, we’d rank the Redmond producer of Windows and the Office software suite among the least innovative companies that America has ever spawned.  Apple has done far better, of course, but its main successes have been in marketing and design rather than in core technologies that are likely to improve our lives. Although we see Microsoft as being on the same track that brought General Motors to bankruptcy, competition – even vicious competition – between the likes of Google an Apple can only be good for consumers.  With the purchase of Motorola, Google has taken a step that could force Apple to do something it almost never does – i.e. lower the price of one of its products, in this case the iPhone.

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indication of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts.  Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2011, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Tuesday, 16 August 2011 | Digg This Article | Source: GoldSeek.com

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