Published on August 15th, 2011 | by Richard Cartwright0
Google buys Motorola Mobility for £7.6 billion
US search giant Google announced today that it is buying the
newly spun off mobile phone manufacturing arm of Motorola, Motorola Mobility
for $12.5 billion USD. According to
Google CEO Larry Page, after the transaction Google will keep Motorola Mobility
as a separate business arm that will continue to make mobile handsets. Mr. Page
went on to stress that the purchase would not affect Google’s relationship with
its Android handset partners, who according to Mr. Page were informed earlier and
were “on board”.
In fact, the Android partners may actually be on board, as it seems clear that the primary
motivation for Google is acquisition of Motorola Mobility’s extensive patent
portfolio, estimated to be approximately 14,000 existing patents and over 7,
000 pending patents. Google is currently embroiled in several lawsuits, particularly
one with Oracle over the underlying Android code. Obtaining the protection afforded by the
Motorola Mobility patent portfolio helps all the handset manufacturers by
reducing the chance of an adverse judgment, and increasing the negotiating position
of Google to settle the lawsuits.
Another interesting point made by Mr. Page was Motorola
Mobility’s experience in the consumer device space. Considering that Google TV
is floundering at best, Google may believe that Motorola Mobility can use its
expertise in the television set top business to rescue Google TV.
The transaction is still subject to regulatory approval by
both the EU and the United States, but both Google and Motorola Mobility executives did not anticipate
any difficulties in closing the all-cash transaction.