Google on Tuesday announced that it would acquire Motorola Mobility for a cool $12.5 billion in cash. As the Wall Street Journal reports, the acquisition should finally afford Google the sort of mobile-focused patent portfolio the search giant has longed for. According to Google, Motorola Mobility will continue to operate as a separate business.
In a blog post announcing the acquisition, Google CEO Larry Page declares that “[t]his 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.” He adds: “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.”
Of course, it’s also true that this acquisition gets Google plenty of hardware manufacturing experience overnight. Motorola offered the first flip-phone, innovative phones like the RAZR, and led much of the pre-smartphone digital era. Though its competitiveness has lagged considerably since, the company still provides Google with tremendous institutional knowledge of the entire phone manufacturing process. Previously, Google worked closely with HTC to deliver the Google-branded Nexus One, but until now the company has had little to no hardware expertise of its own; purchasing Motorola gives Mountain View a foothold into building its own handsets.
The $12.5 billion price tag offered a 63 percent premium on Motorola Mobility’s stock price at the close of trading last Friday; in the most recent quarter, the company posted losses of $56 million.
Updated 9:24 a.m. ET to correct an error related to which company Google worked with in developing the Nexus One.
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