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Sep 19 2008 11:20AM EDT

The Odd Story of Navteq, Moto, Zander and Galvin

Kevin Maney writes: I have a big story called "Who Shot Motorola" in the October issue of Portfolio, and of course here on Portfolio.com. As happens with stories, some stuff gets cut. I lost a few particular sentences that maybe weren't critical, but I thought added some interesting flavor. Those sentences were about the online maps company Navteq. 


The overall story is about the unraveling of Motorola over the past decade, starting with how and why former CEO Chris Galvin was dismissed, how the company came to hire Ed Zander as the new CEO, and how things fell apart under Zander and into the new regime, with Greg Brown as CEO.

Here's what was in the story until just before the final edit:

In a strange twist, online maps company Navteq in 2004 asked Galvin to become its chairman as it prepared to go public. In October last year, Nokia bought the company for $8.1 billion. Soon after, I asked Zander if he knew that Galvin was chairman of Navteq, and Zander said he had no idea. So here was Zander the tech guy struggling to run a big old company while his supposedly doughty predecessor helped guide a zooming start-up to a big payday from both men's top competitor. 

Anyway, here's the exchange I had with Zander when I interviewed him last fall, when he was Motorola's CEO, in front of an audience at the University of Chicago. The Nokia-Navteq deal had just happened. This is right from the transcript:

Q: One of the things you've taken some slack for, just in the last few days, has been about Navteq. They're in your backyard; Chris Galvin's the chairman. 
A: I didn't know that either. 
Q: You didn't know what?
A: About Chris Galvin, I didn't really even know.
Q:  You didn't know he was there?
A: No, I didn't. Honest to God; I didn't know. But it has nothing to do with us. That's not our strategy.
Q:  No?
A: We're in the applications business. I have never seen in tech - and I'm not commenting on my number one competitor. I always have respect for every competitor. And everybody has different strategies. But I've learned at Sun and Apollo and Data General and watching Microsoft. Look at the business today, the industry. Google is not in the hardware business, right?
Q:  Right.
A:  They're not going to be - you know, they don't make hardware. And Microsoft - well, they make an X-box, but largely that franchise is based on software. Oracle, largely based on - not largely, is totally software. Intel - totally hardware and chips. 
Q:  Right.
A:  HP - mostly middleware and computers, not application software. And I've been taught - and this is the way I believe - that if - you've got to pick, pick what side you want to be on. And buying applications and being in the business of delivering applications and telling a carrier what to do like Verizon who has its own set of applications, or choosing sides in terms of who's going to win. Our goal is to provide the best - as we did at Sun, and as, what I think we all should do - the best developer application platform. So we had no interest in things like that. There are tons of competitors to that company (Navteq), and there are hundreds, thousands now in Silicon Valley of startups that are doing applications for these devices. And you've got to be careful you don't start getting into that business. Because now you're getting into the business of your customers. And that's the dividing line that I grew up in. 
Q:  Didn't even strike you as a big thing to worry about?
A:  The price was stunning. Stunning.
A:  Well, the price was stunning.
A:  God bless them. I wouldn't have, if I wanted to pay that kind of money, I mean, it's just crazy.

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