Google Acquiring Motorola Mobility for $12.5 Billion

Hello Moto.

Google (NASDAQ: GOOG) announced today its intention to acquire Motorola Mobility (NYSE: MMI) for $12.5 billion.

The deal will see Google paying $40 per share in cash for the Motorola Mobility shares, which is a 63 percent premium over the close at the end of trading on Friday. Google expects the deal to close by the end of 2011.

The acquisition of Motorola Mobility will give Google its' own hardware division for mobile devices which is something that company has not had previously. Motorola has been one of Android's strongest supporters with phones such as the Droid and the Xoom tablet.

"In 2008, Motorola bet big on Android as the sole operating system across all of its smartphone devices," Google CEO Larry Page blogged. "It was a smart bet and we’re thrilled at the success they’ve achieved so far. We believe that their mobile business is on an upward trajectory and poised for explosive growth."

Page explained that just because Google will own its own mobile hardware platform, that doesn't mean the Android ecosystem will suffer.

"This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open," Page said. "We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences."

Samsung, HTC, LG, Dell and Cisco are among the many hardware vendors that have devices that use Android.

Global Equities Research analyst Trip Chowdhry praised the deal in a quick take review. Chowdhry noted that Google will get approximately 16,000 Motorola Mobility patents as part of the acquisition. He noted that Google could probably be able to use these patents to indemnify other Android Partners against various IP infringements.

Android has been the subject of multiple patent and legal challenges. Microsoft has challenged multiple vendors including Motorola over Android.

Google was recently unsuccessful in a bid for more than 6,000 patents from bankrupt telecom firm Nortel. The Nortel patents ended up going to a consortium of vendors including Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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