Google's Latest Acquisition Is a Nail in BlackBerry's Coffin

With its latest acquisition, Google aims to woo corporate IT departments.

May 20, 2014 at 10:15AM

Following a good start to the week, U.S. stocks are down on Tuesday morning, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) falling 0.28% and 0.35%, respectively, at 10:15 a.m. EDT. In company-specific news, search wizard Google (NASDAQ:GOOG) (NASDAQ:GOOGL) has acquired technology start-up Divide, in a deal that contributes to the momentum of "bring your own device" -- companies allowing workers to use their personal mobile devices for business purposes. Google's drive to bring business users onto Android devices further encroaches into territory that was once the preserve of BlackBerry (NASDAQ:BBRY).


Founded in 2010 by three former Morgan Stanley technology executives, Divide provides a workspace and applications that enable users to compartmentalize business and personal data, "including government-grade encryption." Strictly speaking, "government-grade" isn't a technical term -- not all government agencies require the same encryption standards (think Department of Education versus the National Security Agency). Still, investment bank information technology executives ought to be well versed in data security, as banks tend to be relatively paranoid about the inviolability of their data.

On that note, I would not necessarily have thought of Morgan Stanley as a technology incubator, but when you consider the legions of IT workers that financial institutions employ, it's surprising that this phenomenon isn't more prominent (perhaps the generous pay of IT staff at investment banks acts as a disincentive to striking out on one's own). Indeed, Divide co-founder and Chief Operating Officer Alexander Trewby, who was formerly vice president of mobile development at Morgan Stanley, has referred to his onetime employer a "software house masquerading as an investment bank." Divide CEO Andrew Toy specialized in "mobile-video delivery as well as fixed-mobile convergence telephony" at Morgan Stanley -- who'd have thought?

Divide exists to facilitate bring your own device, or BYOD; as the company explains on its website, it "launched with the belief that BYOD was going to dramatically alter the IT landscape and usher in a new wave of mobility. The company was right..." Too right! Users don't want to juggle multiple devices for different purposes, which poses genuine challenges for corporate IT departments that wish to accommodate them.

Adding Divide's tools to the Android platform enables Google to tighten up its offering to these departments in order to displace BlackBerry devices, and to compete with Apple, too. Nevertheless, a Google spokesman told The Wall Street Journal that Divide will continue to support iOS devices.

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Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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