15 August, 2011

In its biggest acquisition so far (if approved) search giant Google is buying phone company Motorola Mobility for $ 12.5 billion in cash. The deal will give boost to Google’s operating system for mobile device Android. The deal takes Google straight into telecommunications hardware business.

Google is paying $ 40 a share in cash for Motorola, which, Google’s CFO Patrick Pichette said in a conference call for analysts and reporters, is a 63% premium on the mobile devices company’s stock.

Google CEO and co-founder Larry Page first announced the deal today morning in a blog saying it will “supercharge the android ecosystem”. However giving relief to Android enthusiasts he announced that Android will remain an open platform. He added that Google will run Motorola as a separate business.

“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,” said Page.

He said, “today more than 150 million Android devices have been activated worldwide—with over 550,000 devices now lit up every day—through a network of about 39 manufacturers and 231 carriers in 123 countries.”

Motorola has 17,000 patents, Google has about 1,000. Motorola uses Android as operating system in all its smartphones since 2008.

According to Page, 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”.

Larry Page’s blog post on Motorola acquisition(link)