Google 'Supercharging Android' with Acquisition of Motorola Mobility

Google today announced that it will acquire Motorola Mobility for $12.5 billion, giving the Android developer a significant new hardware arm to help drive the platform forward. The deal brings $40 in cash for Motorola Mobility's shares, a 63% premium over Friday's closing price.

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.”

While Google will be able to make a direct move into the hardware business with Motorola Mobility, the company claims that Android will remain an "open platform" and that it will continue to support all vendors offering Android products.

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.”

In a blog post regarding the deal, Google CEO Larry Page reveals that Google felt compelled to make the acquisition in order to address the patent threats facing the company with a number of companies having recently cooperated to acquire large patent pools that could threaten Android.

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. 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.

Google plans to run Motorola Mobility as a separate business and expects the transaction to close by the end of the year or early next year after appropriate approvals from Motorola Mobility shareholders and regulatory authorities.

Update: In a conference call discussing the acquisition, Google revealed that it will be acquiring 17,000 patents and an additional 7,500 filed patent applications in the deal, substantially strengthening its position in the mobile patent arms race.