Hello Google
Did anyone see this coming? We certainly didn't. Search giant Google has just announced it will be acquiring veteran mobile handset company Motorola Mobility for $12.5 billion - a premium of 63 percent.
Moto has been arguable the most devoted Android OEM since its launch, even turning its back on Microsoft in order to focus on the Google mobile platform. While stressing that Android will remain open, and Moto will be run as a separate business Google is selling this deal by saying it will ‘supercharge' the Android ecosystem. We wonder if the other Android handset-makers will see it that way.
Larry Page, CEO 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, CEO 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. 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."
Our first thoughts, apart from what a disturbing move this is for the likes of Samsung, HTC, LG, etc, were about patents. Google was apparently prepared to pay up to $4 billion to get a bunch of patents belonging to Nortel, but allowed itself to to be out-bid by a hastily-assembled consortium of its competitors. For three times that price it has got what must be a larger collection of patents plus a handset business.
Motorola Mobility has the additional advantage of having been split from the communications solutions business, which is more peripheral to Google's mobile device interests. Having said that CEO Larry Page noted the following in his blog post about the announcement
"Motorola is also a market leader in the home devices and video solutions business. With the transition to Internet Protocol, we are excited to work together with Motorola and the industry to support our partners and cooperate with them to accelerate innovation in this space."
Page also openly admitted part of the reason for the move was to strengthen Google's patent portfolio.
"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."
We'll be listening to the conference call discussing this move and providing more analysis subsequently.
