Google acquires Motorola for $12.5 billion

United States

Sophie Roberts - Staff Writer

Google has announced that it has acquired Motorola Mobility - and its patent portfolio - for $12.5 billion, or $40 per share in cash, a transaction that was unanimously approved by the boards of directors of both companies.

Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

Larry Page, chief executive of Google, said, "Motorola Mobility's total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers."

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

He continued: "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."

Analysts and commentators have raced to scrutinize the real motives behind Google's purchase of Motorola and many come to the conclusion that the deal was impelled out of desire to protect Android from further patent lawsuits using Motorola's strong patent portfolio.

But how strong is it? Many analysts have asked this and some have come to the conclusion that yes, this portfolio will help solve a few of Google's ongoing litigation issues concerning its Android system.

The newly acquired patent portfolio might prove to be particularly helpful against Oracle, presenting some interesting cross-licensing opportunities with Motorola's networking and video encoding patents, said one anonymous commentator who is said to be close to the situation.

Google's purchase of Motorola follows the search giant's recent shopping spree at IBM where it acquired just over 1,000 technology patents. At the time, a spokesperson from Google said that "Like many tech companies, at times we'll acquire patents that are relevant to our business."