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Larry Page: Google Acquiring Motorola Mobility

Larry Page, CEO Google just announced that the company is buying Motorola — with an aim to supercharging Android — 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 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,” stated Page.

A statement on Google’s Investor Relations site and Motorola Mobility’s press section quotes Motorola CEO Sanjay Jha, Google CEO Larry Page and the search firm’s senior vice president of mobile Andy Rubin as saying that this strategic acquisition will “enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing.” Google on its part says Motorola Mobility will “remain a licensee of Android and Android will remain open”, adding they will run Motorola Mobility as a separate business.

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’ve 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, SVP 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’ll continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

“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,” notes Page.

“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,” Page said.

Per Page’s blog post:

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.

Patent expert Florian Mueller tweeted he “would caution everyone against overestimating the strength of Motorola Mobility’s patent portfolio,” noting that “Apple and Microsoft sued Motorola Mobility anyway”. Mueller also observed in a blog post that most Android vendors have lost their Linux distribution rights, opening doors to thousands of people out there “who could legally shake down Android device makers, threatening to obtain Apple-style injunctions unless their demands for a new license grant are met”. Mueller also said on Twitter that “Google may want to become an Apple” by entering the hardware side of the mobile business. Steve Jobs several times quoted the legendary tech visionary Alan Kay who had said many years ago that “people who are really serious about software should make their own hardware”.

With this acquisition Microsoft vs. Motorola patent case just took a new turn. Google execs cited patents as a key reason it’s seeking to purchase Motorola.

“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,” said Page in his blog post.

“It takes time to close such major transactions and I believe all litigation involving Motorola will continue, likely including the disputes with Microsoft as well as Apple and others,” said FOSS Patents’ Florian Mueller on Twitter.

Mueller also said he believed that Google’s acquisition of Motorola could negatively affect Android handset makers outside the patent realm, as those companies “would have to compete head-to-head with the supplier of their operating software.”

Microsoft and Motorola have been warring over patents for the past several months. Microsoft sued Motorola on October 1, 2010, alleging infringement of 9 Android smartphones on Microsoft’s patents. On November 9, Microsoft sued Motorola again over wireless and video coding patents that’re used by the Xbox and smartphones. In the latter case, Microsoft claimed that Motorola is charging excessive royalties for its patents.

Motorola retaliated with its own countersuit on November 11, claiming infringement of 16 of its patents by Microsoft‘s PC and server software, Windows Mobile and Xbox products.

[Source: Google blog, Google’s Investor Relations, Motorola Press]

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