Despite Layoffs, Google's Motorola Strategy Aims At Innovation

By Steve Henn

Published August 14, 2012 at 2:33 AM CDT

Google's Android 3.0 Honeycomb OS is demonstrated on a Motorola Xoon tablet during a media event at Google headquarters on Feb. 2, 2011. Google acquired Motorola Mobility in August 2011 for $12.5 billion.

Google is shaking things up at its new subsidiary Motorola Mobility, announcing Monday that it will lay off 20 percent of the company's global workforce. Its strategy is to create a small division led by a technology star to spur innovation at the company that invented the cellphone.

Layoffs at any company are rough, but Charles Golvin at Forrester Research says it's likely employees at Motorola would prefer what's going on there to what's happening at some of their competitors.

"Google is investing in hardware design and innovation," Golvin says.

Companies like Nokia and RIM, the maker of the BlackBerry, however, are fighting for survival.

Google makes the world's most popular smartphone operating system, Android. And though Motorola Mobility lost a quarter of a billion dollars last quarter, Google is still immensely profitable.

The challenge for Google, as it absorbs Motorola, will be to convince companies like Samsung and HTC that it's still going to treat them fairly when it comes to handing out new versions of Android.

"I'm sure Samsung is worried about that," Golvin says.

He says Google has gone out of its way to reassure phone makers like Samsung that whoever can make the best devices — not "whoever has the best relationship with Google" — will win in the marketplace.

If Motorola can't get a leg up on the competition through software, however, it will have to compete in other ways. And that, say Google insiders, is where Regina Dugan comes in.

Dugan was the first woman to lead the Defense Advanced Research Projects Agency. At DARPA, she was known for pushing her employees and asking them what they would do if they couldn't fail.

"If you really ask yourself this question, you can't help but feel uncomfortable," Dugan said at a TED conference, "because when you ask this question, you begin to understand how the fear of failure constrains you."

Dugan backed DARPA research into advanced domestic manufacturing techniques, and she challenged scientists to build lithium-ion batteries smaller than grains of sand, earning praise from academics and military brass.

She left DARPA this spring and now heads a small group within Motorola called Advanced Technology and Projects. Those projects just might provide a hint of where Motorala Mobility may be headed.