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Google Buys Motorola Mobility

August 15th, 2011 by · 1 Comment

Moving solidly into the device space, Google pounced this morning and announced an agreement to purchase Motorola Mobility for $12.5B in cash, or $40 per share.  That’s a premium of 63% above the close on Friday.  Motorola Mobility makes a variety of smartphones, tablets, and other devices – the key being its focus on Google’s Android platform.

Rob Bratby suggests this is all about the patents, following Apple’s recent coup in leading a group of companies in divvying up the Nortel patents.  Such a defensive move certainly seems like a rather major contributing factor, very much inline with how the patent world has been moving lately.  Remember the days when patents meant technological progress?  Nowadays they just mean billable hours and very little else, and skew the competitive marketplace in ways never intended.  I’m definitely leaning toward Mark Cuban’s patent musings of late.

But whatever the other driving forces, Google will soon be a device-maker in a big way – putting them more and more in direct opposition to Apple.  That they would take this route rather than become a telecommunications firm by buying into fiber the way some have speculated for years isn’t surprising, at least to me.  Apple has shown there’s just more money in that business right now – at least if you know how to make cool stuff. Plus you’re on the right side of the ‘upgrade’ world, where you get paid for offering consumers new ways to used data networks rather than the obligation to spend capex to support the extra bits to be carried at the same price or lower.  Steve Jobs has made it look easier than it is though.

Google says Android will remain open to all manufacturers, and that their vision for Android is unchanged.  But of course, the last few years have taught us that words are cheap when it comes to open source commitments so I have to think the verdict on that is a few years away.

Categories: Mergers and Acquisitions · Wireless

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  • peterw says:

    Google would own all of Motorola’s patents, and could license them to (or just share them with) other Android licensees if it wanted to. Motorola invented the cellphone almost 30 years ago, so this is worth a lot.

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