Forget a Spinoff: Motorola Should Sell Its Handset Business

Watching Motorola’s handset business disintegrate is difficult even for those of us who don’t have a tangible stake in the company.

While some optimists retain hope for a comeback in 2009, I don’t see it. The same bunch of reputed leaders that has steered Motorola’s handset ship into the mangroves cannot be expected to suddenly acquire navigational prowess and strategic brilliance. That would be asking for a reversal of established form, and that rarely happens in the absence of a miracle.

Nobody likes where Motorola’s handset group is heading for the remainder of 2008, and plans for a spinoff seem misguided. Motorola should just sell the handset unit to somebody that has a real plan for reviving it. That won’t be easy for anybody, not with low-cost Asian handset vendors relentlessly gutting margins at the low end while Apple and RIM redraw the boundaries of the smartphone market up above.

Microsoft Will Refrain from Internet Buying Frenzy

Microsoft shareholders will be relieved to learn that CEO Steve Ballmer hasn’t lost his mind yet. Despite rumors to the contrary, Microsoft has no intention of staggering through the Valley and other ports of call on a profligate Internet buying binge.

So, no, you wont’ see a Microsoft acquisition of Facebook; nor will you see Microsoft make a determined run at recently refinanced LinkedIn.

Ballmer explained to the Financial Times that the aborted bid for Yahoo was “about the ad platform,” not “about just any one of the applications.” Said Ballmer: “The most important application for the foreseeable future . . . is search.”

And search, as any observer of Google knows, derives its value by serving as a proven platform for advertisements. Social networking? Not so much — at least, not yet.