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Google to buy Motorola's mobile unit for $12.5 billion

Consumer Reports News: August 15, 2011 10:21 AM

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Software giant Google announced this morning its intention to buy Motorola Mobility Holdings, the smart-phone and tablet arm of Motorola, for $12.5 billion, or $40 per share—a 63-percent premium over Friday's closing price for Motorola stock.

The announced buyout—the largest ever made by Google to date—will enable the search-engine giant to strengthen its Android mobile operating system in at least two ways.

At the very basic level, the acquired Motorola Mobility unit, which will operate as a separate arm of Google, could allow faster production of more-capable Android-powered smart phones and tablet computers. The Motorola Xoom, for example, is one of the top performers in our tablet Ratings, available to subscribers.

Google already has numerous partnership with other hardware makers, though, including HTC, LG, and Samsung, and the company's purchase of Motorola Mobile won't change that. CEO Larry Page wrote on the official company blog:

This acquisition will not change our commitment to run Android as an open platform. 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.

But snapping up Motorola does give Google another technical—and business—advantage. When the sale is completed later this year or early next, Google will have added Motorola's portfolio of 17,000 patents and another 7,000 pending patents to its belt.

Again from Larry Page:

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.

What do you think? Is this good news for Android-powered mobile devices? Or is it already too late for Motorola—and Google—to take on the Apple iPhone and iPad Goliath?

Supercharging Android: Google to Acquire Motorola Mobility [Official Google Blog]
Google to Acquire Motorola Mobility [Google Press Release]
Google to buy Motorola Mobility for $12.5 billion [Reuters]
Live Blog: The Google/Motorola Acquisition Conference Call [TechCrunch]
Google To Acquire Motorola Mobility [Wired]

Paul Eng

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