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BLOG: Google and Motorola Mobility: Your questions answered

JR Raphael | Aug. 15, 2011
Google shocked most of the tech world Monday morning by announcing it had agreed to buy Motorola Mobility. That's right: The company that famously doesn't make hardware is now on its way to owning one of the most prominent makers of mobile devices.

Wow -- talk about a surprising way to start the week.

Google Motorola Mobility

Google shocked most of the tech world Monday morning by announcing it had agreed to buy Motorola Mobility. That's right: The company that famously doesn't make hardware is now on its way to owning one of the most prominent makers of mobile devices.

Google's made one thing clear: This Motorola-buying move is all about the patents. But clearly, there are plenty of other potential implications -- and plenty of people wondering what this merger will really mean.

Here are answers to all of your burning questions.

What exactly happened with the Google-Motorola acquisition?

Google and Motorola Mobility entered into a "definitive agreement" for Google to purchase Moto's mobile hardware business. Google paid $12.5 billion, making the deal its largest to date. The price breaks down to $40 per share, which is 63 percent above the level Motorola Mobility closed at on Friday.

So this is a done deal, then?

Not yet. The Google-Motorola acquisition still has to go through all the usual rounds of regulatory approval, both in the U.S. and abroad. Google and Motorola Mobility aren't anticipating a long road: The two companies say they expect the deal to be closed by the end of this year or early next year. That may be an optimistic view, of course; there's little question the companies will face some intense antitrust grilling before any type of approval is granted.

Why does Google want to buy Motorola Mobility?

One can imagine many reasons, but in Monday's press call, Google execs went to great lengths to emphasize that the focus is squarely on patents. Google, as you've probably heard, has been in the middle of a very bitter battle over smartphone patents. Microsoft and Apple's recent purchase of patents from Novell and Nortel seemed to be the straw that broke the camel's back; not long after that move, Google Chief Legal Officer David Drummond wrote a scathing blog post in which he said the companies were "banding together" to use "bogus patents" as a "weapon to stop" innovation, citing the numerous lawsuits against Android hardware manufacturers as evidence.

"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," Google CEO Larry Page wrote in Monday's announcement.

With the Motorola Mobility buy, Google gets a whopping 17,000 patents under its belt -- nearly three times the amount collected in the Novell and Nortel deals combined. Moto also has about 7,000 other patents currently pending, according to its CEO's remarks during the company's earnings call last month. Altogether, that appears to fulfill Google's previous promise, as expressed by Drummond, to "strengthen [its] own patent portfolio" and "reduce the ... threats against Android."

 

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