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Motorola Droid 3
Google will acquire Motorola Mobility for $12.5 billion USD

Well, we didn't see that one coming. Google just announced today via its official blog that itwould be acquiring Motorola Mobility, an American company that produces everything from the Wayans Family-esque lineup of Droid smartphones to the 10.1" Xoom tablet.

The transaction price comes in at a relatively modest (for Google) $12.5 billion, which at $40/share represents a 63 percent price premium over Motorola Mobility's closing price on Friday (MMI is up nearly 60 percent following the opening bell). Not surprisingly, the deal was unanimously approved by both companies' boards.

“This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world," said Sanjay Jha, CEO of Motorola Mobility. "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.”

“We expect that this combination will enable us to break new ground for the Android ecosystem," added Andy Rubin, Google's Mobile SVP. "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.”

If there are no legal roadblocks in Google's path, the deal will be completed by early 2012.

According to Google CEO Larry Page, the move to purchase Motorola Mobility will not have an affect on the openness of the Android operating system. "We will run Motorola as a separate business," said Page. "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."

Page goes on to say that we should expect to see great things on the hardware and software side of things:

The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences. I am confident that these great experiences will create huge value for shareholders.

This purchase will also give Google access to a treasure trove of patents in order to defend itself from competitors. According to The Street, Motorola has a war chest of over 17,000 patents.

Interestingly, Motorola Mobility's Sanjay Jha seemed quite receptive to using Microsoft's Windows Phone 7 operating system just last week. We can now safely assume that those notions are completely dead.

Updated 8/15/2011 @ 3:30pm

Google has posted four quotes from other Android handset makers regarding the acquisition of Motorola Mobility. It seems quite odd how robotic and same-sounding all of the quotes are…

“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.” -- J.K. Shin, President, Samsung, Mobile Communications Division

“I welcome Google‘s commitment to defending Android and its partners.” -- Bert Nordberg, President & CEO, Sony Ericsson

“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.” -- Peter Chou, CEO, HTC Corp.

“We welcome Google‘s commitment to defending Android and its partners.” -- Jong-Seok Park, Ph.D, President & CEO, LG Electronics Mobile Communications Company

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Apple wakes sleeping giant...
By nurbsenvi2 on 8/15/2011 9:03:09 AM , Rating: 5
Apple... this is why you don't fuck with Google.

RE: Apple wakes sleeping giant...
By fleshconsumed on 8/15/2011 9:10:03 AM , Rating: 2
It's still 3x more expensive than what Nortel patent portfolios went for. Of course google also gets hardware maker instead of just patents, however, is google really going to be building smartphones when they are software company only?

By retrospooty on 8/15/2011 9:20:31 AM , Rating: 5
When you buy a large manufacturing company, you are no longer a "software company only"... It will probably operate totally separately though.

RE: Apple wakes sleeping giant...
By semiconshawn on 8/15/2011 9:31:01 AM , Rating: 2
Cheap. They were not going to get the nortel patents. Outbid Microsoft and Apple? They could have bid 20 billion and still lost. They were bidding against a printing press. This is a brilliant end around though. Even if they just spin off everything but the ip its a good move for Google. Big picture 12 billion is nothing. Getting Android killed off would be catastrophic. It will be interesting to see if they try and build some "killer" in house phones for a while before they sell off the hardware side.

RE: Apple wakes sleeping giant...
By B3an on 8/16/2011 2:58:02 AM , Rating: 2
The thing is MS asked Google if they wanted to join them on the bid, but Google didn't accept. MS posted the emails when Google started crying of some conspiracy.

RE: Apple wakes sleeping giant...
By Kiffberet on 8/16/2011 10:52:17 AM , Rating: 2
It's only a good idea if Google and Motorola can come up with a top selling phone/pad.
If not, they run the risk of losing massive revenues when HTC, Samsung and ALL other phone/pad manufacturers that use Android start looking at using a different operating system (Microsoft, perhaps?).

RE: Apple wakes sleeping giant...
By nafhan on 8/15/2011 1:15:47 PM , Rating: 3
It's still 3x more expensive than what Nortel patent portfolios went for.
Did you notice there's also roughly 3x more patents?
Also, pure speculation, but IT'S MOTOROLA. So, it seems likely that there's a higher proportion of applicable patents in this transaction than the Nortel one. Finally, don't forget, they're also getting an entire phone manufacturer on top of the patents.

I'm also really interested to see what Google does with the hardware side of things. Personally, I'd like to see the handset division get spun off, and Google use the Moto patents purely for defensive posturing. I'll go ahead and chalk that up to wishful thinking, though :)

RE: Apple wakes sleeping giant...
By drycrust3 on 8/15/2011 5:06:58 PM , Rating: 2

My bet is that somewhere is a filing cabinet with a picture of some doohickey that has exactly the same shape as a iPad! "Oh no ... look Apple stole the shape of our 1985 PCM bit error detecting set".

RE: Apple wakes sleeping giant...
By bigboxes on 8/15/2011 10:18:02 AM , Rating: 5
Yup. So, when Apple says that you must stop making devices that are rectangular and have a touch screen Google says fine. Just remove all cell phone capabilities from your devices. Ouch.

RE: Apple wakes sleeping giant...
By ltcommanderdata on 8/15/2011 10:29:54 AM , Rating: 2
I wonder do patent acquisitions apply retroactively? This will no doubt discourage future lawsuits, but can these patents be used for current lawsuits? The argument that I might have been doing something shady for the past few years, but since I just bought a ton of patents, everything should be forgiven and forgotten seems kind of strange.

RE: Apple wakes sleeping giant...
By danjw1 on 8/15/2011 10:48:22 AM , Rating: 2
A lawsuit can be settled any time both sides wants it to be. With these new patents, Google can go after the other companies that are hounding Android. Google, is the rare exception, in that they have only ever used patents defensively. You better bet that Apple and Microsoft will try to get regulators to block this acquisition. But I just don't see the case they can make for that, other than: "Well we really, really want you to!!".

This is different from a class action suit or a criminal case, where the judge must decide if the deal is going to be accepted.

RE: Apple wakes sleeping giant...
By michael67 on 8/15/2011 10:55:21 AM , Rating: 1
In this case yes i think so.

In the past, ware patents that ware acquired for offensive use, ware usually forced to be licensed at reasonable rates.

Here the company Motorola it self still dose the patent (counter)suit, and are properly mostly used defensively.

And what properly even gone hurt MS/Apple more is that even do Motorola must make a profit to, they play second fiddle to Android now.
So in a game of patent chicken, Motorola can mouths easier pull the trigger then the others can.

RE: Apple wakes sleeping giant...
By Stuka on 8/15/2011 2:29:55 PM , Rating: 5
Is english your first language? If so, you need a new speech-to-text engine or a new brain-to-finger engine. lol

RE: Apple wakes sleeping giant...
By Gungel on 8/15/2011 10:44:41 AM , Rating: 2
My understanding is that Motorola licensed most of the patents relating to cell phones a long time ago. Apple, MS and others have access to most of Motorola's IP.

RE: Apple wakes sleeping giant...
By nafhan on 8/15/2011 1:21:23 PM , Rating: 2
Suing MS and friends probably isn't Google's intention. At this point, Google probably did this to protect Android licensees rather than go on a lawsuit spree of their own. We'll see over the next couple years, though.

RE: Apple wakes sleeping giant...
By Tony Swash on 8/15/11, Rating: -1
RE: Apple wakes sleeping giant...
By AmbroseAthan on 8/15/2011 2:38:25 PM , Rating: 2
For you go off on this topic again, here are some replies to your questions of the business sense/money:

RE: Apple wakes sleeping giant...
By Tony Swash on 8/15/11, Rating: 0
RE: Apple wakes sleeping giant...
By Reclaimer77 on 8/16/2011 8:53:49 AM , Rating: 1
Yeah right. Google has seen what happens to those who "keep alliances" with Apple before and obviously had no wish to be stabbed in the back.

By icanhascpu on 8/15/2011 1:55:12 PM , Rating: 3
Are you sure you dont want Apple to keep doing what they are doing? Becuse what Apple is doing is getting peoples blood flowing. This can only result in GOOD THINGS for the consumer. Either we get patent reform, large innovation from competitors to overcome silly patent laws, or both.

We are basically getting a fast forward in cell technology from all this. Google is annoyed, will bring out some kick ass phone, and push Apple/MS to keep pace, or (better for us) leapfrog. Repeat.

If you want real evil, look at AT&T.

"This is about the Internet.  Everything on the Internet is encrypted. This is not a BlackBerry-only issue. If they can't deal with the Internet, they should shut it off." -- RIM co-CEO Michael Lazaridis

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