Google Buying Handset Maker Motorola Mobility For $12.5 Billion

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    Aug 15, 2011 12:01 PM GMT
    Pretty remarkable. I would have thought that RIMM would go first.

    http://www.businessinsider.com/breaking-google-buying-motorola-mobility-for-125-billion-2011-8

    Google is buying handset maker Motorola Mobility for $12.5 billion in cash.

    That's a 61% premium.

    Needless to say this is a gamechanger in the mobile world, as Google moves down the stack, and is no longer just an operating system provider meaning it competes directly with Apple as well as the various other handset makers who currently use Android.

    What's more, one of the biggest arguments in favor of Apple's continued to dominance is that without a complete end-to-end "stack", no other platform could compete with its integrated software/hardware setup.

    Bear in mind that Google has over $35 billion in cash, so this answers one question about what they'll do with it. The company still has tons more dry powder.

    Other handset makers, like RIMM and Nokia are both up pre-market on the news as the focus obviously turns to Microsoft: Is it now forced to buy one of them? Or does Microsoft benefit because the remaining handset makers (Samsung, etc.) now turn more towards Windows?
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    Aug 15, 2011 12:06 PM GMT
    Google's announcement here:
    http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html
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    Aug 15, 2011 12:57 PM GMT
    Very interesting. Will also be interesting to see if Samsung does move towards Windows. Can't help but think everything Microsoft touches except for their XBox technology is so "yesterday" and considered uncool. Read about Elop's reasons for Nokia going that route. On paper seemed to be a good option for them, but hard to dismiss his past position at Microsoft influencing that decision.
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    Aug 15, 2011 1:05 PM GMT
    Google just made a HUGE mistake! One of the reasons that they have higher market share than Apple is that many hardware manufacturers could use their software. They could have been the Windows of phones. Now, they'll have enemies in HTC, Samsung, etc. How could they have blown it so badly?
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    Aug 15, 2011 1:13 PM GMT
    swimguychicago saidGoogle just made a HUGE mistake! One of the reasons that they have higher market share than Apple is that many hardware manufacturers could use their software. They could have been the Windows of phones. Now, they'll have enemies in HTC, Samsung, etc. How could they have blown it so badly?


    It's not clear that this is the case. One of their problems recently is the royalties they (and other handset makers) have had to pay to Microsoft for Android. The acquisition of Nortel's patent portfolio went far higher in value than anticipated to the point that Carl Icahn had been urging Motorola to better monetize if not outright sell its own patent portfolio (if memory serves it is something like 17000 patents with an additional 7500 pending). You could even see this acquisition as defensive for Google.

    The reason why HTC and Samsung likely will not change is because Android is the cheapest of the alternatives for the simple fact that the reason Google has Android at all is not because they want to dominate the handset business but they are using it as a moat to protect their castle - search and its associated ad business.
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    Aug 15, 2011 1:15 PM GMT
    Thank you, Google! Woohoo!!
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    Aug 15, 2011 1:29 PM GMT
    More in the conference call:
    http://techcrunch.com/2011/08/15/live-blog-the-googlemotorola-acquisition-conference-call/

    Drummond: We have said we intend to protect the Android ecosystem. We’re not prepared to talk about specific strategies. Having that kind of a patent portfolio is a good thing. Jha: We have over 17k patents issued worldwide. Many applications. Many in wireless standards, many around competitive parts in the marketplace.

    Q: Around Android partners
    Rubin: I talked to the top five licensees. They all showed enthusiastic support. Android doesn’t make sense to be a single OEM. All of our existing OEM partners help make it what it is today.

    Q: What convinced you to acquire Motorola? You’re going to take on some competencies that aren’t core to Google.
    Page: I’m really excited about this deal. There are competencies that aren’t core to us, but we plan to operate it as a separate business, so they have competency there. I’m really excited about protecting and supporting the Android ecosystem. We believe Motorola Mobility has a tremendous opportunity for growth. I think this is a unique opportunity.

    Drummond (re: licensing demands, like those HTC pays): We’ve seen some licensing demands… the patent portfolio will help us make Android “open and vibrant”.

    Q: Regarding Google potentially competing with other OEMs.
    Page: No change in how we’re running Android. Android is still open. Our partners are very excited about this.
    Rubin: Motorola was one of the early licensees. After the transaction nothing changes. It’s business as usual. It’s about protecting and extending the ecosystem.
  • siannoguy

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    Aug 15, 2011 5:12 PM GMT
    No wonder MMI stocks just surged 56%!
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    Aug 15, 2011 5:33 PM GMT
    awesome. i can't wait to see a real google phone.
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    Aug 15, 2011 5:46 PM GMT
    I think they bought moto for the patents alone. They plan on running the company independently and will make moto submit for the nexus bid just like htc. After they lost the novell bid they had to find a portfolio to gobble up. The patent war is upon us.
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    Aug 15, 2011 9:05 PM GMT
    Yes, this is all about the patents. The other OEMs should be (and seem to be) quite happy about this situation because it should strengthen the position of Android and hopefully weaken various lawsuits they are facing themselves (like with Samsung's Galaxy Tab).