As we all awoke to the news of Google's acquisition announcement, many are focusing attention on the smartphone side of Motorola Mobility's business (after all, it is Motorola Mobility). While the idea of Google taking on Apple directly is certainly a big story, the impact on the video services market is just as profound.

Effectively, this move puts Google in bed (or at least in a potential too-close-for-comfort position) with many key players in the video world. Motorola Mobility is one of the two leading set-top box makers for the North American market. Comcast, the largest cable operator in the US, uses STBs from Motorola Mobility, Cisco, and Pace. How excited will Comcast and other cable operators be to have a major player in the ad business as a vendor for their set top boxes? AT&T uses Motorola Mobility boxes for its U-verse service as well as Microsoft Mediaroom for its middleware / video delivery platform. How excited must Microsoft be at the Google news?

Everyone in the video delivery business will be reassessing their positioning relative to the new Google - from technology to business models. Until Google clarifies its plans for the TV market, there will be several uncomfortable executives in this arena.

- Brett Sappington, Director of Research