Google Buys Motorola Mobility for US$12.5 Billion

Google has entered into an agreement to win the mobile phone maker Motorola Mobility for about US$12.5 billion, the party same on Monday.

Google has offered about $40 per share in cash, a insurance premium of 63 percent over the closedown monetary value of Motorola Mobility shares on Friday.

Motorola Mobility solely ships phones and its Xoom tablet with Google's Android in operation organization. The deal will mingy that Google now has a ironware manufacturer to figure out with closely to develop Android, said Carolina Milanesi, search vice president at Gartner.

Google wish also have control of Motorola's impressive patent of invention portfolio, Milanesi same. Motorola Mobility same earlier this year that it owns about 24,500 patents.

CEO Larry Page confirmed that Motorola's patent portfolio is part of what successful Google clear its wallet. "Our acquisition of Motorola volition increase competition by strengthening Google's patent portfolio, which will enable us to better protect Humanoid from anti-emulous threats from Microsoft, Apple and other companies," he said in a blog post, a affirmation he repeated during a conference call with the media.

Conflict with Partners?

But the dispense may also create tension with other cellphone manufacturers such As HTC and Samsung, which also ship Android devices, she said. Since creating Android, Google has rotated manufacturers with which to release spic-and-span Android cypher, emotional the encode to others about six months future.

Google may risk antagonistic those other manufacturers, but Milanesi said "all these vendors have invested such in the platform, they South Korean won't rapidly walkway inaccurate from it."

Microsoft has Nokia along its side, while other smartphone vendors have focussed on Android so far. However, the acquisition could help boost Microsoft Windows Phone 7 operating system, CCS Perceptivity wrote in a research note.

During the conference call, Google did its best to facilitate those fears. Google has talked to some of its partners and they welcomed the deal, according to Page. The party volition continue developing its Google Nexus phones, and development process of those phones will still be vulnerable to vendors differently Motorola, said Andy Rubin, senior V.P. of movable at Google, on the conference call.

Google Crataegus laevigata also deficiency to speed the growing of its Android operating system on tablet computers, where it has been slower to latch on than on mobile phones, Milanesi said. The next release for Android, inscribe-named "Methamphetamine Cream Sandwich," leave be an operating system designed for tablets and mobile devices.

The attainment of Motorola Mobility will enable Google to "supercharge the Android ecosystem and enhance competition in changeful computing," according to a news release. Google said the deal will not impress how Android is developed, and the operating organization leave remain open, Google said.

In addition to smartphones and tablets, Motorola Mobility also develops dictated-top boxes. The transition to make these supported IP will accelerate as a result of the deal, every bit will the convergence between mobile phones and content that touch homes via set-top boxes, according Sanjay Jha, CEO of Motorola Mobility, speaking on the conference call.

The company will run Motorola Mobility, which has about 20,000 employees, as a separate business, Google said. During the second quarter, Motorola Mobility was the one-eighth largest phone maker in the humanity, according to Gartner.

The dealing is expected to close at the end of this year or proto next year.

Motorola Mobility, which was spun off from its parent company in early January, is coolheaded of two groups: Mobile Devices, which makes phones, and Domicile, which makes set-top boxes and other IPTV equipment.

(Jeremy Kirk in London contributed to this report)

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