Google to buy Motorola Mobility for $12.5 billion to bolster patent portfolio

“Google Inc. said it will buy Motorola Mobility Holdings Inc. for about $12.5 billion in cash in a move to bolster the adoption of its Android mobile phone software,” Franklin Paul and Sayantani Ghosh report for Reuters.

“Google, maker of the Android mobile phone operating system software, has been forging ahead in the smartphone market but has been hampered by a lack of intellectual property in wireless telephony,” Paul and Ghosh report.

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Paul and Ghosh report, “Google said the deal will close by the end of 2011 or early in 2012 and that it will run Motorola Mobility as a separate business.”

Read more in the full article here.

MacDailyNews Take: The plot thickens.

Google CEO Larry Page has addressed the move via the Official Google Blog:

Since its launch in November 2007, Android has not only dramatically increased consumer choice but also improved the entire mobile experience for users. Today, more than 150 million Android devices have been activated worldwide—with over 550,000 devices now lit up every day—through a network of about 39 manufacturers and 231 carriers in 123 countries. Given Android’s phenomenal success, we are always looking for new ways to supercharge the Android ecosystem. That is why I am so excited today to announce that we have agreed to acquire Motorola.

Motorola has a history of over 80 years of innovation in communications technology and products, and in the development of intellectual property, which have helped drive the remarkable revolution in mobile computing we are all enjoying today. Its many industry milestones include the introduction of the world’s first portable cell phone nearly 30 years ago, and the StarTAC—the smallest and lightest phone on earth at time of launch. In 2007, Motorola was a founding member of the Open Handset Alliance that worked to make Android the first truly open and comprehensive platform for mobile devices. I have loved my Motorola phones from the StarTAC era up to the current DROIDs.

In 2008, Motorola bet big on Android as the sole operating system across all of its smartphone devices. It was a smart bet and we’re thrilled at the success they’ve achieved so far. We believe that their mobile business is on an upward trajectory and poised for explosive growth.

Motorola is also a market leader in the home devices and video solutions business. With the transition to Internet Protocol, we are excited to work together with Motorola and the industry to support our partners and cooperate with them to accelerate innovation in this space.

Motorola’s total commitment to Android in mobile devices is one of many reasons that there is a natural fit between our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers everywhere.

This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.

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.

The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences. I am confident that these great experiences will create huge value for shareholders.

I look forward to welcoming Motorolans to our family of Googlers.

Source: Official Google Blog

Google’s press release follows, verbatim:

Google to Acquire Motorola Mobility

Combination will Supercharge Android, Enhance Competition, and Offer Wonderful User Experiences

MOUNTAIN VIEW, CA and LIBERTYVILLE, IL – AUGUST 15, 2011 – Google Inc. (NASDAQ: GOOG) and Motorola Mobility Holdings, Inc. (NYSE: MMI) today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies.

The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance 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 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.”

Sanjay Jha, CEO of Motorola Mobility, said, “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 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.”

The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The transaction is expected to close by the end of 2011 or early 2012.

Webcast Information

Google and Motorola Mobility will hold a conference call with financial analysts to discuss this announcement today at 8:30am ET. The toll-free dial-in number for the call is 877-616-4476 (conference ID: 92149124). The call will also be webcast live at http://investor.shareholder.com/media/eventdetail.cfm?eventid=101369&CompanyID=ABEA-3VZHGF&e=1&mediaKey=A21887C59EBAAC12F1BCF4D43C080953. The webcast version of the conference call will be available through the same link following the conference call.

About Google Inc.

Google’s innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google’s targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia. For more information, visit www.google.com.

About Motorola Mobility

Motorola Mobility Holdings, Inc. fuses innovative technology with human insights to create experiences that simplify, connect and enrich people’s lives. Our portfolio includes converged mobile devices such as smartphones and tablets; wireless accessories; end-to-end video and data delivery; and management solutions, including set-tops and data-access devices. For more information, visit motorola.com/mobility.

Source: Google Inc.
 

77 Comments

    1. Wow. Isn’t Apple pretty much the reigning king of if you can’t make it yourself buy it. And they have the cash to do it. It’s the way the business works, but the hypocrite “pots always calling the kettle black” are annoying.

      1. Apple’s modus operandi is nothing like Google’s. Apple builds up its patent portfolio by clever acquisitions of nascent technologies that have a future impact on smartphone and tablet development. Google just bought an old nag that was ready for the chopping block. Good luck with integrating that piece of rubbish.

        1. I believe Apple was part of the consortium that outbid Google on a ton of Nortel patents ($4.5B), and rumours are that Apple itself is chipping in $2.5B i.e. over half the total bid.

  1. Now it’s on! It’s all about patents. Yes AAPL is suing everybody to protect their business as well as stifle competition just like the other guys. It’s a free for all. There is no knight in shining armor. It’s business and now it will be a more level playing field. In fact this may slow the litigation frenzy. I hope so. These companies need to spend their money and resources on development not lawyers.

    1. But what’s the point of spending billions on R&D when everybody else just slavishly copies your products and sells them dirt cheap. Isn’t that stifleing development? That’s why Apple are fighting to protect their IP.

    2. Arguably, Apple is following the way patents were intended to be used – defending the innovations they actually came up with (and ones they merely bought).

      You’d do well to review this article, which illustrates some genuine Apple innovation:

      “On April 28, 2010, Nokia requested ex parte reexamination of all twenty claims of the ‘381 patent based on four prior art references, three of which were not cited in the original prosecution. […] Nokia relied on the same prior art for its invalidity contentions in supplemental interrogatory responses that it provided six months later, in effect conceding that it had not been able to find any better prior art, despite a year of litigation. […] The Patent Office subsequently found Nokia’s arguments unpersuasive and confirmed the patentability of all twenty claims.”

      1. I do believe that AAPL is currently paying Kodak for patent infringement. I have to agree with Thomas, AAPL has probably bought more innovative companies than anyone. And I’m glad. Do you really think that AAPL is innovating from the original group of employees? C’mon, grow up. I’m a user and shareholder so I want them to succeed. It’s funny how the fanboys just can’t carry on a conversation unless it lifts AAPL and runs down everybody else. It’s a company. They make things. They are the largest company. They are interested in making money and great stuff. Don’t act like they’re your best buddy. They are not. Act like an adult. If you need a buddy get a dog.

        1. I reply with a substantive argument and all you can do is play the fanboy card? Come on.

          The problems with our patent system are legion, but its core *intent* is to allow companies who genuinely innovate to defend those innovations. The scrolling patent genuinely appears to be an innovation Apple came up with all on their own, and that, to my mind, should be something they can defend.

          Google, in contrast, appears to be contributing no ideas of their own, merely buying themselves “protection”. You can’t honestly look at the two companies and call them equivalent in this area.

          1. Hey Spade, how much did AAPL pay for patents?…………..? Right. Apple is a great innovative company. Steve is a great leader. But they buy ideas just like everybody else. Geez! Who are you trying to convince? Yourself? Keep up with what AAPL as a business does. OK gotta go. Market opens in 3 minutes. GOOG is down AAPL is up a touch. Have a good day Spade. Buy some Sept. AAPL calls. Get involved withAAPL as a business. Don’t just post messages.

            1. The reason Apple, Microsoft, and other companies pooled together to buy those patents, was to keep them out of the hands of PATENT TROLLS – companies which make no products and merely go around suing companies which *do* make products. This is a real problem in the industry, so they band together and do this for self-defense. This wastes a lot of money for these companies, and illustrates the need for patent reform.

              The only reason Google was excluded from the deal is because Google wanted the patents all to themselves – they’re not interested in being a “team player” to help keep patent trolls at bay, instead participating in bidding and driving the costs of those patents up to astronomical levels (before turning around and having the gall to complain about how much money those patents went for, then paying three times as much to acquire another company solely for their patents).

              I’d recommend that you more closely follow the wider details behind these kinds of stories, instead of focusing on just the parts that tell the story you like to hear. There’s a lot of details you didn’t seem to be aware of in your comments.

    3. Google will be spending about $12.5 billion in cash so they can keep giving away their FREE Android OS!

      “Stupid is as stupid does”!

      Wasn’t there a story about a obsessed captain and a white whale. How did that end? That captain didn’t know when to back off either.

      1. When Google develops a driverless car, you won’t want to sit in it because when you engage ‘drive’ on the gearbox, it goes into reverse. In Google’s terms, winning is losing.

        1. And of course the GPS will speak,”This right turn brought to you by Chevron! Stop in for some gas, just 3 miles ahead!”

          And, periodically, audio ads will bump the radio and video ads will playback where your speedometer should be 🙂

      2. Google will be bleeding cash and getting indigestion after swallowing up Motorola. Motorola is not known for consistent performance. It’s a roller-coaster company: one step forward and 5 steps backward was its constant curse. What would Google’s partners think about this arrangement? Would they become the step children or equal partners alongside Motorola? Google’s headache is just beginning. Just watch out for the impending implosion.

  2. On to the next waste of production line tooling confection that Google and Motorola can bake up…sadly their half-baked beta desserts can only compete when handed out as trick or treat BOGO bags.

    1. Yeah, strange how that happens. Their early stance on Net Neutrality similarly lasted only as long as they needed it to last, illustrating their hypocrisy. Google have no shame.

    2. Hmmmmmmmmmm let’s see, didn’t AAPL just spend billions on patents? Oh you forgot about that? I see. I loved it when AAPL ponied up billions to buy someone else’s innovations. Why not? It’s business. Eat or be eaten. You don’t really think that Steve minds buying someone’s ideas do you? He is the ultimate businessman! And you can bet that he would never respect the opinion of someone (fanboy) who lives in a fantasy world (mom’s basement) do you?

      1. The reason Apple, Microsoft, and other companies pooled together to buy those patents, was to keep them out of the hands of PATENT TROLLS – companies which make no products and merely go around suing companies which *do* make products. This is a real problem in the industry, so they band together and do this for self-defense.

        The only reason Google was excluded from the deal is because Google wanted the patents all to themselves. But I’m sure you’re prepared to excuse them for that, since Google would have nothing but good intentions for owning those patents all to themselves, right?

        1. Dude keep dreaming. First off no ‘patent troll’ had the kind of cash it was going to take to buy those patents to begin with. If you’ve got 1 billion plus to blow on patents you are far removed from the ‘troll’ realm of things.

          MS and Apple already own plenty of patents, they really didn’t need Nortel patents to ‘protect’ themselves from anything, add to the fact that (excluding actual patent trolls) both MS and Apple seem to be on a campaign of FUD and litigation towards anyone making Android devices and its pretty obvious why they bought the Nortel patents.

          Seriously… do you honestly think Steve B and Steve J were sitting around one afternoon and said “holy sh*t.. we better buy Nortel so that we don’t get sued… God damn Lodsys might throw out a couple of billion for these things if we aren’t paying attention!”

          Google was clear why they did not want to ‘be a team player’. It would have done nothing for them in terms of defending Android and that was the point of attempting to purchase the patents to begin with.

          Quote: A joint acquisition of the Novell patents that gave all parties a license would have eliminated any protection these patents could offer to Android against attacks from Microsoft and its bidding partners. Making sure that we would be unable to assert these patents to defend Android — and having us pay for the privilege — must have seemed like an ingenious strategy to them. We didn’t fall for it.”

          1. I think Microsoft and Apple banding together to bid for and acquire Nortel’s patents was a tactical move to put the squeeze on Google. To which I say well played. Google has to be put in place not least because wholesale copying cannot under any circumstance be called innovating. 

            Eric the Mole was in a privileged position as a member of Apple’s board but instead of moving motions in favor of Apple, he had a secret photocopying machine running 24/7 under his desk which ripped off Apple’s intellectual property and passed it on to Google. Eric was given the catbird’s seat in Apple’s labs on the future development of smart phones which caught the entire industry napping except for Google. 

            We know why – it’s because Eric the Mole gave them a head start on Apple’s development plans particularly relating to multitouch gestures. Now that the patent issues are being settled in court, Google is running scared of being slammed against the wall and is acquiring whatever means possible to buy protection. Unfortunately like the CDO’s (collateralized debt obligations) that Goldman Sachs sold, this putative move may well turn out to be an illusory form of protection.

      2. @Gm,
        Fanboy yourself idiot, you lose any and all points you have tried to make, whatever they may be when you start throwing stones in a glass house.

        Drop the fanboy BS, how freaking old are you, and learn to stop posting cause you got but hurt that Google just sucks.

        1. Google sucks? Dunno. Don’t care. I have a life. Pity you don’t. And goodness, it’s not nice to call people idiot. Right fanboy? I just made money on GOOG. What have you done this morning?

            1. Hater? I own Apple products only. Have for over 25 years. Typing on my iPad 2. Also own the stock. Hater? How about I simply have an opinion that doesn’t sit well with you? You have yours. I have mine. I choose to call em like I see em. I love AAPL but realize that they are the most competitive company in the tech field and will do what they can to win. You choose to only see that AAPL does everything perfectly and everybody else does everything wrong.
              Personally I find that weird but hey, whatever makes you feel good. But it’s called prejudicial thinking. That’s not reality.

          1. You make several cogent points. In all fairness I think this is a purely defensive move by Google before Android gets crushed beneath an avalanche of lawsuits. I do have friends with Android handsets and mini tablets but every time I speak to them they tell me they bought it because it’s cheap and that they’d buy Apple the first chance they got.

      3. GM-
        Thought you had to sign off a few minutes ago and focus on the “market”?

        Speaking of which- how do you explain that GOOG was down over 12 points in pre-market trading this morning following Giggle’s announcement they were buying MMI?

        Apparently the market disagrees with GOOG’s reasoning…

        Just sayin’

        1. Let him speak his mind. I think Google will ultimately fail with this acquisition because MMI is beyond saving and Google doesn’t have the expertise of running a hardware company. I like to listen to opposing views sometimes, if it comes from members of this community and isn’t posted by some tard.

        2. Options. Do you know what an option is Kronos? Buy low ; GOOG opened down. Sell high ; GOOG went up rapidly after the opening bell. Took less than 6 minutes. Not bragging it’s simply trading. Sometimes you win sometimes you lose. But this was a rare opportunity to make money. You could have bought shares of stock at the opening but it would have cost a fortune. I tied up a small percentage of that amount by buying calls (option) and made more than if I had purchased shares. So yes Kronos, I did have to break away for a while. But it was worth it. Try reading something other than posts on an AAPL site Kronos. There’s a whole world out there with things to do and learn. Read. Learn something. It can be profitable.

        3. Actually moron they were down over 15. Which helped me even more than if it was 12. Geez, what a dumbass! Maybe tomorrow mom can get up and make you pancakes so you aren’t so stupid.

      4. Sure Apple spent 2.5 billion on patents, so what? Everyone is kvetching at Google because they made a bid for those same patents, and then cried foul when they lost. As soon as they lost, the google party line was Patents are evil and kill true innovation. They mocked everyone else for buying patents instead of ‘innovating’ Forget the fact that they wanted and tried to get those very same patents.

        Apple NEVER talked out of its butt about evil patents while trying to buy them. They never issued a statement one way or another. They kept their mouth shut, and did what they felt was needed to strengthen the IP they already own. Seriously GM, go troll somewhere else. Perhaps Paul Throwups Windows Supersite or Gizmodo would be a better fit for you

  3. WTF? Google’s lead ambulance chaser gets out there and whines like a school yard child over AAPL and Co. buying the Nortel patent portfolio, yet it’s totally cool for Google to then turn around and buy Motorola Mob. for it’s patent portfolio? What a worthless bag of tools! Every single day I find a new reason to wish AAPL would put them on the ropes and not let up. Google’s idea of innovation is to buy other companies that “make” products. They don’t even have to be “good” products, the company just has to “make” them. What goons.

  4. It makes sense. With handset makers pressure from MS and Apple, the dark Oracle cloud and finally a commoditized product with small margins, some were eventually going to walk.
    I had thought they would end up with struggling RIM, but this makes a lot more sense, Google talking a more active role in the development of their products is also an added benefit included with he patents.
    The business models of Google, Apple, HP, and MS are looking more alike every day.

    1. Google’s business model is nothing like Apple’s. Apple buys thriving companies chockfull of future technologies. Google just bought the last two tickets to the Titanic.

    2. Apple’s business model is to defend innovative products it actually sells to consumers.

      Google’s business model is to buy enough patents/patent holders in order to defend its copycat ways, so it can claim ownership of all intellectual property in existence to further sell ads.

      So yeah, those business models really are looking alike, aren’t they? Not!

      1. Spade you only see what you are interested in seeing. AAPL buys ideas. Do you understand that? They buy companies and roll them into AAPL. Just like everybody else. Remove the rose colored glasses. It’s called business. It’s ok. I bought and sold 5 GOOG calls at opening this morning. That’s called business. I try to make money. I did well this morning. Hopefully the rest of the day goes as well. If it doesn’t I won’t blame everybody else. I live in the real world. I’m an adult not a child.

  5. Google’s argument is that they bought Motorola and its patents in order to level the playing field and force the world away from litigation and “towards innovation”… In other words, they were forced to do this in order to refocus everyone in the “right direction”, as everyone kept going after Google in court, rather than “by innovating”.

    I’m not sure, though, how much value those Motorola patents are going to have against Apple (’cause that’s the only reason they bought them). Motorola hasn’t had any meaningful successful patent claims against Apple so far. I’m positively sure they had vigorously pursued all available legal options against Apple in their battle to hold onto the marketshare. Clearly, they didn’t have much to go on. I simply can’t see you will Google be more successful.

    1. Motorola hasn’t had the financial resources to go against Apple. They have had one loser product after another. Panic and fear have plagued upper management for a number of years now. I’m not sure the former dunderhead managers could have ferreted out if they had valid patents or not.

    2. Motorola’s patents were so useful that Motorola raked in $0 in licensing fees. Expect Google to turn this around by giving away $15 to every Android manufacturer as a ‘protection racket.’

  6. Larry Page has the gall to call others “anticompetitive” in justifying this move. Which is a clever way of distracting attention from how extremely anticompetitive this move must feel to their other Android licensees…

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