News: Google to Acquire Motorola Mobility

Posted on August 15, 2011

If you can’t beat ’em, buy ’em. That seems to be the mentality of Google, as they plan to buy Motorola Mobility Holdings, Inc., the spun-off arm of Motorola. The deal will be about $12.5 billion and seems to be centered around patents. Google missed out on the recently sold Nortel Networks patent portfolio, and not only complained about it, but could have joined Apple, Microsoft, RIM, and others instead of trying to compete against them.

The deal, as reported by CNET, is pretty sweet for Motorola Mobility, with Google paying a little extra and complaining again about Apple and Microsoft:

In the wee hours of Monday morning, Google dropped a bombshell on the technology industry with its announcement that it will buy mobile handset maker Motorola for $40 a share, a 63 percent premium over the closing price of Motorola Mobility on Monday.

For Google the move takes the search giant away from its core competency of developing software into a new realm of becoming a hardware maker. Motorola, which has been in existence for 80 years, is one of the oldest mobile phone makers on the market. In fact, it developed the first commercial cell phone.

With Motorola’s long history in mobile comes an enviable treasure trove of intellectual property that could help Android fight a mounting patent assault from the biggest names in technology.

In his explanation of the deal, Google’s CEO Larry Page mentioned in his blog post that Motorola’s strong patent holdings were a major consideration in the deal.

“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.”

Clearly, it’s all about the patents:

This is where Motorola comes in. The company has patent portfolio that includes more than 17,000 approved patents. And it has another 7,500 patents filed and pending approval. This portfolio of patents is substantially larger than the group of patents that was sold from Nortel Networks.

How long until this deal is wrapped up and Google sues Apple?

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