Google (and Intel) write down Clearwire investment; Google optimistic about Android platform

Google’s fourth quarter results were hurt by write downs related to investments in AOL and Clearwire. The Internet search leader also said it remained confident about the progress of its Android platform for mobile handsets.

Google reported a net income of $382 million, down 68 percent from the $1.21 billion in the year-ago period, but that was primarily due to write downs of its investments in AOL and Clearwire by $726 million and $355 million, respectively. Google CEO Eric Schmidt stated, "Both deals (Clearwire and AOL) made sense to us then and make sense to us now, and continue to be a strategic part of our overall business philosophy,"

Google, along with Intel, Comcast, Time Warner, Brighthouse and others invested $3.2 billion in the new Clearwire. All of these Clearwire investors face huge losses.

Intel recently took close to a $1B charge on its Clearwire investment (Intel’s profits were down 90% in the most recent quarter). Clearwire’s stock has dropped more than 70 percent since the deal was announced in May, resulting in a $950 million “impairment charge” for Intel. That comes less than a month after Intel Capital’s head honcho- Arvind Sodhani – stated he was excited, rather than worried, to have sunk so much of Intel’s portfolio into Clearwire. Of course, it must have been obvious even then that the investment would end the year with a big loss.

Google also expressed support for its Android platform, even though it only has limited support among U.S. wireless carriers. T-Mobile USA is the only carrier to date that supports an Android-based handset, the HTC-made G1. Sprint will reportedly begin offering an Android handset in the first half of 2009.

Note that many pundits think Google will finance a company to build a WiMAX handset, due to their investment in Clearwire. We disagree.  In our opinion, the Clearwire stake was a strategic investment to enable more people to access Google’s ads, maps, and other content.

Do you think the future Sprint Android device will have embedded WiMAX capability to support CLEAR?  Note that Clearwire already stated that VoIP would not be introduced for CLEAR anytime soon.

Google Very Optimistic About Android

"Well, we think the Android numbers will start to speak for themselves, particularly this year, now that we’ve got some additional partners signed up to get to the next generation from a hardware perspective on the platform," said Jonathan Rosenberg, Google’s senior VP for product management. "So we are very optimistic about Android."

Here is what one blogger thinks about Google’s business going forward:

Google keeps its one-trick pony healthy

What do you think about Google’s Clearwire investment and prospect for Android handsets- with and without WiMAX capability?