Google buys Motorola for $12.5 billion and declares outright war on Apple

Posted In Android, Mobile Web, Motorola - By Ryan On Monday, August 15th, 2011 With 1 Comment

Google has just closed the loop in their plan to dominate the mobile world. They’ve purchased Motorola Mobility (which owns all of Motorola’s mobile interests) for $12.5 billion in cash. Have you seen what $12 billion in cash looks like? No, neither have we.

Google’s move now completes their mobile strategy to own the operating system (with their launch of Android), the mobile handset (with their purchase of Motorola) and the advertising revenue on the phone (through Adwords on Google Mobile). Best of all, if you’re Larry or Sergey, they don’t have to share one red cent of the revenue, as they’ve been forced to do by inking deals with cellphone manufacturers who use Android OS.

Google said in a statement that they will continue to run Motorola Mobility as a separate business. But they’ve said that before, and it’s usually just to soften the blow for staff and customers. Remember Picasa? They’re weeks away from being renamed Google Photos. Make no mistake about it, Google hasn’t paid $12.5 billion to build someone else’s brand. My prediction is that Motorola will be Google Phone before the next 12 months are out.

Google CEO Larry Page announced the deal in a blog post and said the core attraction in the deal was because of Motorola’s strength in Android devices, but also because they are “a market leader in the home devices and video solutions business”. Motorola? Really?

What this really boils down to at the end of the day is money and power. Money because they’ve closed the loop. And power because they can now officially declare war on Apple. The gloves are off. And Page is unashamedly throwing down the gauntlet in his blog when he says, that the deal will “enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies”. Yes, other companies. Riiiight.

Here’s the full press release:

Google Inc. (NASDAQ: GOOG) and Motorola Mobility Holdings, Inc. (NYSE: MMI) today announced that they have entered into a definitive agreement under which Google will acquire 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. The transaction was unanimously approved by the boards of directors of both companies.

“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 acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

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.”

Andy Rubin, Senior Vice President of Mobile at Google, said, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, 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.”

The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The transaction is expected to close by the end of 2011 or early 2012.

About - With at least 20 phones tucked away in drawers around the house and office, Ryan is a buy-to-try mobile consumer and loves playing with new handsets. Right now he's stuck on the iPhone 4.

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