Google buying Motorola Mobility for $12.5 billion

Google buying Motorola Mobility for $12.5 billion
Well, that's what we call a good start of the week – Google and Motorola Mobility have announced a $12.5 billion deal under which the search giant will acquire the phone maker. This translates into a per share price of $40, meaning that Google is ready to pay 63% over Motorola Mobility's share price as per the company's Friday's closing price. This puts the search company on the same foot as Apple and other Android handset makers as Google will turn into more than just a platform maker.

The deal is expected to close by the end of 2011/beginning of 2012. But it's not just Motorola's handset expertise that this deal brings - it's a transaction which is equally about patents. Just a couple of days ago Motorola said it wants a piece of that patent pie and that might have been one of the reasons for the acquisition. Motorola Mobility reportedly owns more than 17,000 patents and is among Google's best options for defending its mobile OS. Google's Larry Page himself points out:

"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." Page was also excited about the possibilities this brings for Android, "supercharging" the platform.

Andy Rubin heading Google's mobile efforts reaffirmed the company's commitment to Android as an open source platform as well as to the open source community. The deal would only elevate the platform, while Google itself will continue to work with its Android partners and continue distributing devices running the OS.

What were the reverberations among Motorola Mobility's fellow Android phone makers? The chief executives of HTC, LG and Sony Ericsson all welcomed the news as the move both defends and strengthens Google's case for the platform. But this opens a ton of questions starting with the future of Motorola's Blur skinning and ending with how this affects rival platforms and most notably Microsoft's Windows Phone. Not all answers will come right away, but Motorola Mobility's conference call is live now and will definitely add more clarity to the picture - we'll update you soon, so stay tuned.


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