Google to buy Motorola Mobility for $12.5 bn

Google shook up the mobile phone industry with the announcement it is buying US smartphone maker Motorola Mobility for $12.5 billion in cash in a bid to extend the reach of its Android platform.

The surprise move gives Google a strong patent portfolio to defend Android against lawsuits from rivals such as iPhone and iPad maker Apple and turns an Internet company known for its software into a hardware manufacturer.

Analysts said the acquisition also has major implications for handset makers such as Taiwan's HTC, South Korea's Samsung and others who are using Android to power their mobile devices.
Google and Motorola Mobility said the Internet titan will buy Motorola Mobility for $40.00 per share.

Google and Motorola Mobility said their boards of directors have unanimously approved the deal - Google's largest acquisition ever, dwarfing its $3.1 billion purchase of online advertising firm DoubleClick.

Under the agreement, Motorola Mobility will remain an Android licensee and Google will run the unit, which employs 19,000 people and reported a net loss of $56 million last quarter, as a separate business.

Besides smartphones, Motorola Mobility is a leading maker of TV set-top boxes and analysts said the acquisition could see Google make a renewed push for Google TV, which merges online content with traditional TV programming.

Motorola Mobility also makes an Android-powered tablet computer, the Xoom, and Gartner analyst Michael Gartenberg said Google has "shaken up the tablet market in a big way."
"Google no longer has to depend on third parties to deliver their vision to compete with the iPad," he said.

"Suddenly you have Google, already a serious platform player, becoming a serious integrated vendor from end-to-end for everything from phones to tablets to television sets," Gartenberg said.

Google chief executive Larry Page said Google and Motorola Mobility "will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers."

He said the deal will help protect Android against patent lawsuits targeting the open-source mobile operating system which Google provides to smartphone and tablet makers for free.

"Our acquisition of Motorola will increase competition by strengthening Google's patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies," he said.

Google bid earlier this year for 6,000 patents held by bankrupt Canadian firm Nortel but lost out to a consortium made up of Apple, EMC, Ericsson, Microsoft, Blackberry maker Research in Motion and Japan's Sony.

• Tweet
• Share
• Share
• Share
• Share