Google Is Buying Motorola

Crazy news just in — Google is acquiring the handset division of Motorola, Motorola Mobility, for $US12.5 billion. This means Google could soon officially be in the hardware business.

Could, because the deal has to pass regulatory scrutiny from governments around the world plus the eyeballs of Motorola's shareholders. But should that all clear, this is a big, big deal. From the press release (below), "the acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business." HTC, Sony Ericsson, Samsung, LG and the other Android manufacturers must be quaking in their boots today. That said, despite offering 32 phones — 21 of which have Android baked in — Nasdaq pegged Motorola with a paltry 3 per cent market share as of the beginning of this year. Not exactly a commanding force. Then again, that was before Google was at the reins.

Some additional thoughts:

• Google putting out its own hardware makes things super awkward for Google's Android partners, and could be the best thing that ever happened to Windows Phone. Samsung, HTC, et al, are going to need another avenue of attack, since Motorola branded products are going to theoretically have a major advantage, even if Google insists they're going to have to compete like every other phonemaker.

• What does this mean for Google's retail skills? They totally boned the original Nexus launch. On the one hand, now they've got Motorola's supply chain and competencies. On the other hand, Motorola lately hasn't been all that amazing (3 per cent share, and that's with the most visible Android brand name on the market).

• Motorola's got something like 21 Android handsets. Does that mean we're suddenly going to have two dozen phones running stock Android? That would be kind of incredible. At the same time, other OEMs are probably going to be even more aggressive with their skins so that they can "differentiate". In an ideal world, they're forced to find a way to actually improve the Android experience. In reality, they're probably just going to screw it up more.

[Businesswire and TNW]

Update: A blog post on Google's official blog states that part of the attraction for Google was Motorola's generous (17,000) handful of patents, with CEO Larry Page writing:

"We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to "protect competition and innovation in the open source software community" and it is currently looking into the results of the Nortel auction. 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."

Just in case you had little doubt in your mind, patents are the new basketball cards.

MOUNTAIN VIEW, Calif. & LIBERTYVILLE, Ill., Aug 15, 2011 (BUSINESS WIRE) — Google Inc. GOOG -3.15% and Motorola Mobility Holdings, Inc. MMI +60.36% today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for $US40.00 per share in cash, or a total of about $US12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies.

The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

Larry Page, CEO of Google, said, "Motorola Mobility's total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers."

Sanjay Jha, CEO of Motorola Mobility, said, "This transaction offers significant value for Motorola Mobility's stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses."

Andy Rubin, Senior Vice President of Mobile at Google, said, "We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices."

The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility's stockholders. The transaction is expected to close by the end of 2011 or early 2012.


Comments

    Who cares about iphone wannabe's? More importantly when is the new iPhone getting released. I heard it will have a dual core processor and an 8 megapixel camera. What phone in the world has a dual core and 8 megapixel camera!! Yeah revolutionary beat that android!!!

      I see what you did there.

      http://i758.photobucket.com/albums/xx222/Kalypsonite/I-see-what-you-did-there-Fry.jpg

        Hah,.. +1

        Right on!! Some one had to call it

      http://www.gsmarena.com/htc_evo_3d-3901.php

      HTC EVO 3D - dual core processor

      :O

      i love a good troll.

      most of the new WP7 mango phones will have dual core processors, and 5,8,12 megapixel cameras. Plus WP7 runs faster on a single core CPU then android does on a dual core one.

      i am betting in 2-3 years iPhone will have 20% market share, Android 35% and WP7 45%.

        While I'm massively keen on Mango, show me a single dual core WP7 mango phone that has been officially announced? Especially given only one device has been announced with specs.

        Remember the "rumourmill" had several dual core 7.0 devices, but none of that was true either.

      This is a joke right?...

      Samsung Galaxy S2 is dual core and packs an 8MP camera....

      http://www.gsmarena.com/samsung_i9100_galaxy_s_ii-3621.php

      Does that mean the new iphone is technically a Galaxy S2 wannabe?

      *sigh*

        Yeah man it was a joke. I have a Galaxy S II. But it would be good to see google/motorola undertake some real innovation in handset designs in both hardware and software. Software I think WP7 has the biggest potential but the push notifications and live tiles are painfully slow.

        I think he was being facetious.

    Motorola hold the patents on WiFi and H.264. It'll take some digging to find out, but I expect that they kept those little gems in the other half of the company. If not we'll soon see how genuine Google are about open standards. H.264 could be 'given' to the world now just as WebM/V8 was intended. If they obtained it and don't release it, it's time to pull the "y'all full of it" card... after all, wasn't H.264's licensing ties the reason for the world to need V8 in the first place??

      Wifi - no they dont: http://en.wikipedia.org/wiki/Wi-Fi_Alliance

      H.264 - no they dont: http://en.wikipedia.org/wiki/MPEG_LA#H.264.2FMPEG-4_AVC_Licensors

      Also, you're talking about VP8, V8 is a javascript rendering engine for Webkit browsers.

      Doesn't CSIRO hold the Wi-Fi patents? They took Buffalo to court and won, after that they took almost all of the big boys to court and they folded one by one, given CSIRO millions of dollar, some say that it would be worth billions.

        CSIRO hold what I feel is a very vague patent relating to the use of a wireless tranceiver and transponder to transmit signals. See more here: http://en.swpat.org/wiki/CSIRO_wifi_patent

        They don't own "wifi" at all.

        http://arstechnica.com/microsoft/news/2010/11/microsoft-sues-motorola-over-excessive-wifi-h264-pricing.ars
        I believe they have different patents relating to the same tech.

          I don't know how they can be different but honestly I'm not up to speed on the whole thing as Wi-Fi to me is a Wireless LAN type connection.

          http://apcmag.com/csiro-could-scoop-billions-from-wi-fi-patent.htm

          http://www.patentstorm.us/patents/5487069/fulltext.html

            At a guess.. I'd say Moto holds the specifics to the protocol. The WiFi "standard". Don't worry, we're all doing some learning today. Everything is pretty vague in patent land.

    Personally I think Google should take this opportunity to build a proper Google/Android phone that will really compete with the build quality of the iPhone. And maybe have exclusive features for Android on Motorola branded phones, that way there's incentive for people to pick them up from any of the other bathousands Android handsets.

    It will be interesting to see how this pans out. Not a huge fan of Android but good luck to them.

    I did NOT see that coming.

    Well well.

    Did not see that coming lol, so google paying 12.5 Billion for Motorola handset division, would this be on par with the Microsoft/Skype Buyout as big money.
    What next, facebook buys the internet lol.

      What's next - Microsoft buys Nokia :-)

        http://www.cnet.com.au/microsoft-to-buy-nokias-phone-division-339315171.htm

        Maybe...

    I love how Motorola came out last week and said they'd love to get a deal with Microsoft like Nokia, and now they'll be owned by google.

    Even google's in house hardware don't love them!

    The sad thing about this deal is that there's been plenty of talk of "Now we own lots of patents! Awesome!" and zero talk of "Now we can control the software AND hardware! Awesome!"

    Does this include jsut the handsents or does this also include all the infrustructure type equipt that motorola also developed. Because that would mean big things too. I remember seeing mobile phone towers filled with motorola servers as base stations and some nokia.

    This article is just pure hatred against Google/Android and a cum bucket fest for Apple fanatics.

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