Not the prettiest of quarters, but that penny-a-share profit beat the consensus estimates of analysts, who had expected the company to simply break even.

“We delivered on our commitment to improve the financial performance of Mobile Devices and to commercially launch two smartphones in time for the fourth-quarter holiday season,” Sanjay Jha, co-CEO of Motorola and CEO of Mobile Devices, said in a statement.

“The introductions of our new products powered by Android,” Jha continued, “are important milestones as we begin to address the mobilization of the Internet and the growing demand for modern smartphones. Next year, we will continue to expand our smartphone portfolio and deliver improved financial results.”

Glad those layoffs are paying off for someone.

Which is not to say that Motorola’s suffering is over. Sales at the company’s struggling wireless division dropped a precipitous 46 percent to $1.7 billion. Its estimated global market share is now 4.7 percent, compared with 8.4 percent it claimed in 2008. An ugly decline indeed.

That said, with some strong new Android handsets in the pipeline, things are beginning to look up for Motorola (MOT). At $8.44, company shares are trading up six percent this morning.

Why? Well, the CLIQ, or DEXT as it will be confusingly branded in the U.K., incorporates Motorola’s new “MotoBlur” service, which essentially corrals Facebook, MySpace, Twitter, Picasa, GMail and MS Exchange activity into a single feed and presents them on your phone.

In form, the CLIQ is a sideways slider. Like the Palm (PALM) Pre, the device boasts a full touchscreen and QWERTY keyboard. It’s got a 320 x 480-pixel, 3.1-inch HVGA screen and a five-megapixel camera. The CLIQ is video-capable (play, stream and capture) and supports the broad spectrum of media formats. It runs Android 1.5 (Cupcake), and Motorola (MOT) claims a battery life of six hours.

Jha says the phone is not intended to be a single iconic device–like, say, Apple’s (AAPL) iPhone. Rather, it is the first of a broad line of handsets, all running Android and Motoblur, that will be targeted at different customer segments around the world.

A wise strategy in the current market? Who knows? But at least it’s a step in the right direction. Motorola clearly needs to do something to right itself after the past few disastrous years. Hard to believe the company controlled 16.1 percent of the global handset market just two years ago. It’s market share today? A modest 6.5 percent. The CLIQ will be sold through T-Mobile in the United States.

The device’s spec sheet below; click to enlarge.

Motorola’s explanation for the shortfall? The company doesn’t seem to have one, although it says it’s looking forward to launching a more “differentiated” handset lineup later this year. During a conference with analysts, Motorola co-CEO Sanjay Jha said the company plans to bring a number of devices running Google’s (GOOG) Android mobile OS to market in the months ahead.

“We will have two Android devices by the holidays,” said Jha. “And we have plans for more devices in the first quarter of 2010.” These will get the company “back in the game in smartphones,” Jha added, noting that most of the devices the company plans to launch next year will fall under that category. “Our core strategy really is to take Android as low down on the feature-phone tier as we possibly can,” he said.

For Motorola, which has been losing money and market share for longer than anyone cares to remember, that’s a wise move. A killer Android handset at a reasonable price would do much to carry the company toward its hoped-for turnaround. But as Avian Securities analyst Matt Thornton notes, developing such a device is no easy task when a number of other handset makers are building Android devices as well.

“Motorola made the right choice and the only choice with Android,” Thornton said. “It remains to be seen how Motorola will differentiate itself from its competitors.”

BoomTown provided continuing coverage of the Yahoo (YHOO) merry-go-round. This time, PR head Jill Nash announced her departure. As the company’s chief communications officer, she’s had a challenging two-year run. New CEO Carol Bartz definitely has some PR ideas of her own, including offering cash prizes to employees who provide info on their colleagues who leak information to the press. Not a huge deterrent yet, apparently–it didn’t take long for BoomTown to get info on both Nash’s farewell memo and Bartz’s bounty system. Next, New Networks, the publisher behind BarelyPolitical and its hugely viral Obama Girl videos, has widened its purview to include the tech sector with BarelyDigital, which the online network has envisioned to include regular shows, tech news remixes and the like. It’s rumored that Obama Girl will be making a cameo appearance or two. If the first two features are any indication, the future looks pretty funny. In another round of executive musical chairs, Time Warner’s (TWX) AOL ad head Lynda Clarizio will be leaving the online service, to be replaced by former Yahoo ad exec Greg Coleman. Microsoft (MSFT) is launching a slick new celebrity site on MSN called Wonderwall, created, designed and produced by BermanBraun Interactive, a Hollywood company run by former Yahoo media chief Lloyd Braun. And speaking of musical chairs, MSN is clearly upping its content ante–earlier this week, it hired Yahoo’s recent media head Scott Moore, who used to work at Microsoft.

MediaMemo asked: What happens when one of the world’s richest men lets loose a swarm (a small swarm) of mosquitoes at a high-end conference? Nothing too exciting, really, but when you consider that the stunt was the publicity-generating part of Bill Gates’s talk at TED, which was a discussion of malaria and some of the problems the Bill and Melinda Gates Foundation is facing head-on, it gets pretty compelling. Kindle 2.0, the new generation of the device dubbed the “iPod of the book world” will be unveiled Monday at a New York press event, but how many of the devices have been sold thus far? Amazon’s (AMZN) not telling, but Citigroup analyst Mark Mahaney estimates the number at 500,000–and believes that the Kindle will be a $1.2 billion business next year. Obviously, a lot will depend on Monday and the new device’s reception. MediaMemo also took some time out this week to wish Facebook a happy fifth birthday, and to stack its track record next to Google’s at the same age, with interesting results. Even the pros are getting hit hard these days–in its quarterly earnings report this week, News Corp. (NWS) missed its estimates, recorded an $8.4 billion write-off and lowered its guidance. CEO Rupert Murdoch admitted that the downturn is worse than he thought. He also admitted that he spent $2.8 billion too much for Dow Jones. (News Corp. is the owner of Dow Jones and this Web site.)

Digital Daily followed the trial of four Google executives this week on criminal charges of defamation and breach of privacy after a much-publicized two-year investigation. Google (GOOG) insists the charges are unwarranted and “akin to prosecuting mail service employees for hate speech letters sent in the post.” Clearly, the ultimate outcome will have a huge impact on the future of a free, open Internet. MySpace said this week that it has identified and ousted 90,000 registered sex offenders–and those are just the ones brilliant enough to use their real names. There’s no way of knowing how many are actually using the service or how to prevent them from re-registering once they’re deleted. A free an open Internet, indeed. DD also pondered the future (or lack thereof) of the Motorola (MOT) handset division. Co-CEO Sanjay Jha says the company is committed to making the business work, but its products are looking boring and outdated, and a turnaround would be prohibitively expensive to execute. In the words of one analyst, the company’s problems are “gruesome.” On the other end of the spectrum, Microsoft continues to vehemently deny reports that it’ll be producing its own smartphone. In a report this week, analysts from Broadpoint.AmTech speculated that the device could be uncrated later this month at the Mobile World Congress in Barcelona. Meanwhile, it’s been up in the air for two years whether or not iPhones will ever be uncrated in historic Georgetown. Apple (AAPL) has been around the table a few times now with preservationists wary of the architectural impact of an Apple store, no matter how much the business traffic is needed in the neighborhood. Looks like perseverance may have finally paid off, though–Georgetown’s Apple store could open later this year.

In Personal Technology this week, Walt Mossberg took a look at a program called Foxmarks, which sets out to synchronize bookmarks among all of your browsers and all of your machines. Sound a little too handy to actually work well? Walt found it does a pretty good job, with a few caveats. In Mossberg’s Mailbox, Walt responds to readers who want to know more about doing “techie” maintenance on their PCs to keep them running well, whether or not to buy a 15-inch MacBook Pro, and options for email within Windows 7, which won’t ship with a built-in email program. In the Mossberg Solution, Katherine Boehret tests Google Latitude, an opt-in program that lets users track one another’s movements on their smartphones using GPS, Wi-Fi, and cell towers. Kind of like Gawker Stalker, only with permission and without Lindsay Lohan (unless you happen to be Lindsay Lohan).

Last but not least, Silicon Valley lost one of its own this week. The widely admired and much loved Mike Homer, whose rare, severe illness was a rallying point for many over the past months, passed away last weekend and was laid to rest on Thursday.

More next week.

As the table above (click to enlarge) clearly shows, Motorola’s handset business is fast deteriorating, with fourth-quarter sales plummeting 51 percent.

And it’s only going to get worse. A weak product portfolio has already shorn Motorola’s share of the handset market to 6.5 percent–about half what it held a year ago. And with no strong product offerings until late 2009/early 2010 and consumer spending declining, Motorola’s prospects in the mobile handset sector look lousy. “They better hurry and fix mobile devices or it will become irrelevant,” said RBC Capital Markets analyst Mark Sue. Goldman analyst Simona Jankowski agreed: “I feel their position in handsets is awful and will get worse,” she told Reuters.

Indeed, as Global Crown Capital analyst Tero Kuittinen notes, Motorola’s entire handset portfolio is in disrepair. “Media keeps focusing on the high-end trouble–and Lord knows their luxury line-up is a hot mess,” said Kuittinen, who describes the company’s phone problems as “gruesome.” “But the real issue here is Motorola’s aging mid-range and low-end portfolios, particularly the senescent W-series, which is their big volume driver. Nokia executed an aggressive low-end revamp in the second half of 2008–bringing features like a megapixel camera and QVGA display to notably low price points. Motorola’s mass market models are looking heavy, boring and outdated in comparison. Redesigning the low-end portfolio is extremely expensive–particularly if you have to redesign the high end at the same time. I think it’s this issue that may become insurmountable for Motorola.”

So perhaps its time for Motorola (MOT) to do the inevitable: shutter its mobile devices division. After all, there’s no way it’s going to spin it off during this recession.

Said Kuittinen, “Shutting down the handset division would be incredibly painful and would happen only when every other option is ruled out. But the other two options are becoming increasingly unlikely. They really tried to sell or merge the handset unit a year ago–no takers in China or Japan while those economies were still doing OK. The other option would be to turn around the handset business. But they seem to be pulling back from the low-end market and withdrawing into mid-range and high-end. That’s a tough trick to pull off, because they have almost no high-end business left and running the mid-range portfolio alone is something no company has ever done successfully. Motorola’s volumes are getting too small to support a global business.”

The handset maker this morning said it will cut compensation and benefits packages for its employees in order to “better align with industry norms”–industry norms in Motorola’s case being the ongoing collapse of its post-Razr phone business. To that end, the company will permanently freeze its U.S. pension plans and temporarily suspend all matching contributions to 401(k) plans. It won’t be offering salary increases this year, either. And, in a sympathetic nod to Motorola’s (MOT) long-suffering employees, co-CEOs Greg Brown and Sanjay Jha will take 25 percent salary reductions. Brown will forego any 2008 cash bonus. Jha will forfeit a portion of his guaranteed 2008 bonus equivalent to that and take the remainder in restricted stock.

“The sustained downturn in the global economy requires that we take these difficult but necessary steps,” said Brown and Jha. “While serving our customers remains a top priority, we are equally focused on our cost structure, and we will continue to implement appropriate measures to conserve cash and reduce expenses.”

Happy holidays, Schaumberg.

During a conference call with analysts, Motorola (MOT) co-CEO and handset division chief Sanjay Jha confirmed earlier reports that the company will simplify cellphone unit operations by focusing on two operating systems: Google’s (GOOG) Android and Windows Mobile. Which means the first half of 2009 will be a challenging one for Motorola, as it phases out devices based on the MOTOMAGX and Symbian platforms. “I think that that will reduce the number of phones that will launch at least in the second or third quarters of next year,” Jha said. “But I think thereafter, we expect that using Android and Windows Mobile, to be able to address larger portion of the mid- and high-tier market.”

He better hope so, in this economy.

“The reality is there is no good fix here,” said Jha. “We have been too focused on bright shiny objects and not on the user experience. Whether we succeed or not, only time will tell.”

On the CEO search, we’re making very good progress and I will obviously keep you posted, and when we have something to announce, we will do so accordingly.”

– Motorola CEO Greg Brown, Jul. 31, 2008

When Motorola CEO Greg Brown told investors last Thursday that the company was making progress in hiring a CEO for its mobile division, he wasn’t kidding. This morning the company named former Qualcomm (QCOM) COO Sanjay Jha to the position.

“Sanjay’s technical expertise and industry experience make him ideally suited to lead mobile devices,” board Chairman David Dorman said in a statement.

Great news for Motorola (MOT), which has spent months searching for an executive to run its handset division, with several candidates reportedly refusing the job. With that position finally filled, the company is firmly on track to spin off the division as a separate company in the third quarter next year, as planned.

Then begins the arduous task of reversing the ongoing collapse of the company’s post-Razr phone business and its share price which is down more than 61 percent since Oct. 2006.