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Google makes Motorola move

by Stuart Wilson, Monday 15 August 2011

Google is snapping up Motorola Mobility for US$12.5 billion cash – a 63% premium on the device vendor’s closing share price last Friday. Despite buying its own hardware outfit, Google has reiterated its commitment to continue developing Android as an open platform used by multiple device vendors.

The deal was unanimously approved by the boards of directors of both companies. Google claims that the deal will allow it to ‘supercharge the Android ecosystem’ and will boost 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 at 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.”

Writing on the official Google blog, Page fired a warning to Apple and Microsoft as he explained part of the rationale behind the deal. "We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to ’protect competition and innovation in the open source software community’ and it is currently looking into the results of the Nortel auction," Page wrote.

"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," he added.

Sanjay Jha, CEO at Motorola Mobility, commented: “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 VP of mobile at Google, added: “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 regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The deal is expected to close by the end of 2011 or early 2012. Motorola Mobility’s product line-up includes Xoom tablets and a range of smartphone devices.

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