Google acquires Motorola Mobility

This is big news. Google has announced that it is poised to buy Motorola Mobility for $12.5 billion. The acquisition has been approved by the board members of both companies. That means it’s as good as done – that is, if the regulatory bodies across the world don’t put an anti-competition spanner in the works. Motorola’s mobile business has been on the blink lately, but its Android based offerings such as the Xoom tablet fared better. This news still comes as a surprise.

Search giant intends to run Motorola Mobility as a separate business. It claims that the Android OS will continue to remain open (relatively speaking, of course) and that the acquisition will have not put other Android hardware partners at a disadvantage. Google’s takeover of a veteran mobile hardware manufacturer could translate into better integration of Android into mobile devices, especially in the wake of fragmentation evident with the platform.

The real reason for Google paying over 60% premium on Motorola’s stock valuation lies in the wealth of patents held by Motorola Mobility. Not too long ago Microsoft and Apple had joined forces to pip Google for the Nortel patents, which were then leveraged to mire the latter in lawsuits and royalty claims.

For the 12.5 billion asking price, Google will not only get the company, but also the patents. Bear in mind that the deal will give the Android messiah four times the number of patents as Microsoft and Apple acquired with the $4.5 billion Nortel deal. Looks like Google will have the last laugh here.

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