Free Smartphones? Top 5 Reasons Google Wants Motorola


4. Killing off "patent trolls." Patent trolls, eh? It's another bit of tech-speak for people who file patents on new ideas and, if companies invent the real thing, demand compensation, saying they were there first.

"It's killing innovation and it's slowing innovation," said Paul Saffo, a managing director and technology forecaster at Discern Analytics. "It's classic extortion."

Google likes Motorola because, over time, it has been granted something like 24,000 patents (the company won't confirm the number) on cellphone technologies -- powerful ammo if they want to put them in actual phones.

5. Taking over the world. Well, not quite, but taking on Apple, Microsoft, Amazon and other contenders. They'd all like to sell you service contracts, apps, and wireless minutes, and unless antitrust regulators get in the way, "GoogleMoto," as Saffo called it, will have a leg up.

"Google can't sell anything to save its life but it is the only multi-national that seems to understand how to get advertisers to pay for everything," said Enderle in an email to ABC News. "By controlling the hardware they can close in on Apple's quality, and Apple can't match them on price. If they execute -- a big if because this merger is between two very different companies -- they could unseat Apple."

Yes, but ...

It all sounds grand, except to people in one critical place: Wall Street. Google stock dropped about 1 percent Monday after the Motorola announcement, and another 3 percent Tuesday.

And then Standard & Poor's -- yes, the same S&P that downgraded the U.S. government's debt on Aug. 5 -- downgraded Google stock from "buy" to "sell."

"The purchase," wrote S&P analyst Scott Kessler, "would negatively impact GOOG's growth, margins and balance sheet. Based on revised DCF analysis, we are cutting our 12-month target price to $500 from $700."

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