Google buys Motorola Mobility for $12.5B

Google announced that it is acquiring Motorola Mobility. The search and online advertising company is buying Motorola for approx. $12.5 billion (or $40 per share).  The price shows a premium of 63 percent to the closing price of Motorola Mobility shares. Google had about $39 billion in cash at the time of last count.

Here’s the other important part of the deal (the why, and what happens to Android now):

google-motorola-partnershipThe 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.

In a blog post, Google co-founder and CEO Larry Page wrote that Google has acquired Motorola not just because of its strength in Android smartphones and devices, but also for being a “market leader in the home devices and video solutions business.”

It’s also a move to build up the company’s patent portfolio, he adds, as it will “enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies”.

According to Motorola Mobility’s website, the company holds approximately 14,600 granted patents and 6,700 pending patent applications, worldwide, as of January 2011.

Motorola Mobility is what used to be the Mobile Devices division of Motorola until January 2011.

A few years ago, Motorola bet its future in the mobile devices market by going full Android, launching the “Droid” – initially on the Verizon network – on November 6, 2009. The “Droid X” and “Droid 2? followed in 2010.

Big question now is: how will HTC, LG, Samsung, Sony Ericsson, Acer, Lenovo and other Android device makers respond to this news? What do you think?

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