Google Buys Motorola Mobility To Square Up Against Apple As Phone Maker

August 15, 2011

11:00 am

This morning Google announced the acquisition of Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. This is by far Google’s largest acquisition and could remind some Internet old timers of Aol’s acquisition of Netscape for $4.2 billion back in 1998. The acquisition thrusts Google into being a leading handset maker and offers them some key patent protection for it’s open Android mobile development platform. Motorola has a rich history in the mobile development space and holds more than 17,000 patents. It also lines them up with some additional parity to Apple.

Larry Page CEO of Google had this to say of the acquisition:

“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.”

The deal could turn some rivals against Google as Motorola has been in battle with LG, HTC and Samsung, just to name a few. This made us wonder about the future platform openness of Android. Andy Rubin, Google’s senior vice president of mobile, said in a statement that the Android platform will remain open:

“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.”

What else does Google get in this deal? Motorola Mobility has ~19k employees, $3B in the bank, a thriving business around TV set-top boxes and phone accessories (cases, chargers, headsets, etc), a great deal with the state of Illinois for their headquarters (in Libertyville, IL) and more.

So it will remain to be seen if Google stays true to those words and is not in fact looking to duplicate Apple’s business model. What do you think of this acquisition? How do you think it will affect Android moving forward?

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Frank Gruber is the cofounder, CEO and Executive Editor of Tech.Co (formerly Tech Cocktail). He is the author of the book, Startup Mixology, Tech Cocktail’s Guide to Building, Growing, and Celebrating Startup Success. He is also a startup advisor and investor to startups.

Find Frank Gruber online and follow him on Twitter at @FrankGruber.

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