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Google announces plans to acquire Motorola Mobility for $12.5B

post #1 of 237
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Google revealed on Monday that it will buy handset maker Motorola Mobility, giving the search giant an entrance into the hardware business and allowing it to compete with Apple more directly by building devices tailored specifically for its Android mobile operating system.

The company announced the planned acquisition, pending regulatory approval,and said the combination of the two companies will "supercharge Android, enhance competition, and offer wonderful user experiences."

"Motorola Mobilitys total commitment to Android has created a natural fit for our two companies," Google CEO Larry Page said. "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."

The sale price of $12.5 billion amounts to about $40 per share in cash, or a premium of 63 percent over the closing price of Motorola shares on Friday, Aug. 12. The boards of directors of both companies unanimously approved the pending deal.

"This transaction offers significant value for Motorola Mobility's stockholders and provides compelling new opportunities for our employees, customers, and partners around the world," said Sanjay Jha, CEO of Motorola Mobility.

"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."

Google said it will continue to run Motorola Mobility as a separate business. The company will remain a licensee of Android, and its mobile operating system will "remain open."



The deal must receive regulatory approval in the U.S., Europe and other regions. The transaction is expected to be finalized by the end of 2011 or early 2012.

"We expect that this combination will enable us to break new ground for the Android ecosystem," said Andy Rubin, senior vice president of mobile at Google. "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."
post #2 of 237
I predict this move will squeeze out other Android licensees. There is a reason Microsoft did not build computers. I doubt this will have much effect on Apple.
post #3 of 237
I thought the design behind Android let IT be tailored to fit any hardware. Isn't tailoring the hardware to suit the software the opposite of that? Or are they just copying Apple once again and making hardware and software together that are designed from the get go to work together? ANd what impact will that have on any other mfgs desire to use the OS?
post #4 of 237
Quote:
Originally Posted by lilgto64 View Post

I thought the design behind Android let IT be tailored to fit any hardware. Isn't tailoring the hardware to suit the software the opposite of that? Or are they just copying Apple once again and making hardware and software together that are designed from the get go to work together? ANd what impact will that have on any other mfgs desire to use the OS?

You would have to think this will seriously piss off HTC, Samsung etc. Especially given the issues around Google preventing some licences putting other third party apps on the handset. On the one hand saying you must play by our rules, and now directly competing, sure to annoy them no end.

And so much for all the hyperbole about how bad patents are, let's just go and bus us some more!

And... a 63% premium, wow, that is a lot of cash burnt. Wonder what the shareholders reactions will be. Will be interesting to see how the market responds.
post #5 of 237
Hmm, things just got interesting.
post #6 of 237
Quote:
Originally Posted by msuberly View Post

I predict this move will squeeze out other Android lisencees. There is a reason Microsoft did not build computers. I doubt this will have much effect on Apple.

This will bring good competition between Apple and Google. As a result Apple has to do things better to excel and Apple will do that.
post #7 of 237
Bold move. I wonder what HTC and other Android using handset makers will think about this...
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post #8 of 237
No, they didn't bought Motorola because of building Andriod Devices or making hardware etc. They brought Moto because of their HUGE patents portfolio.

I have always called for Apple to acquire Moto. They have a gigantic no. of patents relating to Tele communication, much more then Nortel or Nokia.

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post #9 of 237
Quote:
Originally Posted by Y.M.S.BUSHAN View Post

This will bring good competition between Apple and Google. As a result Apple has to do things better to excel and Apple will do that.

While true, I agree with the above statement about it squeezing the other Android licences more. Think about it, if you are an Android fan, you will buy Android, from one of many vendors. You never were going to buy apple.

Now it will come down to choice between a tightly integrated (oh the irony) Googorola handset, and the rest of the Android bunch.
post #10 of 237
Quote:
Originally Posted by ksec View Post

No, they didn't bought Motorola because of building Andriod Devices or making hardware etc. They brought Moto because of their HUGE patents portfolio.

And if true, which I suspect it is, shows they think they were in a lot of trouble with there current position, enough to splash $12B at 63% premium worth!
post #11 of 237
Quote:
Originally Posted by ksec View Post

No, they didn't bought Motorola because of building Andriod Devices or making hardware etc. They brought Moto because of their HUGE patents portfolio.

RIght, and I think one of the few things we can conclude immediately is that Moto will continue to fight both MS & Apple with every legal tool available. They will be hoping to have acquired enough legal leverage in terms that by the time the merger goes through they are in a position to demand broad cross licenses with both.

Even if Apple or MS gets an injunction that cripple's Moto's business, this purchase offer allows Moto to ignore the damage and press on.
post #12 of 237
It was Moto Mobility they brought, at 63% premium

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post #13 of 237
So much for open source.
post #14 of 237
Google in their Press State it wont be a merge. Moto Mobility will runs as a separate unit. So business as usual. There will still be Moto Phones. It is only the owner changed hands.

And of coz, the most important pieces is the on going battle between M$ and Moto on Andriod Patents issues.

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post #15 of 237
For those curious there's a conference call at 8.30ET

http://investor.shareholder.com/medi...BCF4D43C080953
post #16 of 237
Quote:
Originally Posted by msuberly View Post

I predict this move will squeeze out other Android licensees. There is a reason Microsoft did not build computers. I doubt this will have much effect on Apple.

My exact first thought. Then you have to think they thought this through ... something else might be going on here. As others have said maybe patents.
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post #17 of 237
I wonder what was more appealing to GOOG - the control of hardware design or Motorola's patent portfolio?

I also wonder if this was first proposed by Motorola. Their CEO has been opining for some time that he wanted control over the OS, but his company does not have a strong record for it. So maybe he was hinting at this all along?
post #18 of 237
And Oh, i forgot.. No more "Hello Moto"

It is now, " Goodbye, Moto" :P

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post #19 of 237
Quote:
Originally Posted by ksec View Post

And i have yet to see where this 12B 63% premium coming from. Moto has been trading at $40 for a few days already. So where is this "premium" coming from?

It has? You're mixing up Motorola solutions and Motorola Mobility.
post #20 of 237
This still requires regulatory approval, wonder whether licensees will be heard and what they might say?
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post #21 of 237
Quote:
Originally Posted by ksec View Post

And i have yet to see where this 12B 63% premium coming from. Moto has been trading at $40 for a few days already. So where is this "premium" coming from?

Well it was taken direct form the WSJ breaking news page... though they are not showing it now. My bad if wrong, but just reporting it as they had it

Though as pointed out above, Motorola Mobility is what they are buying, not Motorola.
post #22 of 237
Quote:
Originally Posted by ksec View Post

No, they didn't bought Motorola because of building Andriod Devices or making hardware etc. They brought Moto because of their HUGE patents portfolio.

I have always called for Apple to acquire Moto. They have a gigantic no. of patents relating to Tele communication, much more then Nortel or Nokia.

Give this man a cigar!
post #23 of 237
Google, prepare to pay many fees on the patents you bid 'pi' on.
post #24 of 237
Google claims they will operate Motorolla Mobility and Android separately. It seems the only reason to buy a failed mobile manufacturer is the IP, unless you planned to leverage your software.
post #25 of 237
Quote:
Originally Posted by stelligent View Post

I wonder what was more appealing to GOOG - the control of hardware design or Motorola's patent portfolio?

Or maybe they just really really hated Motoblur I'm seeing a lot of jubilation from android users that it will be gone forever on places like TIMN.
post #26 of 237
Does anyone really think this was a play to get into first party hardware? That might happen, but it hardly seems to the main reason.

Patents. Moto has lots of them. Google needs them. Having a channel for releasing their own 'tailored' hardware is secondary.

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post #27 of 237
Quote:
Originally Posted by stelligent View Post

I wonder what was more appealing to GOOG - the control of hardware design or Motorola's patent portfolio?

yup. patents.

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post #28 of 237
Quote:
Originally Posted by ksec View Post

Google in their Press State it wont be a merge. Moto Mobility will runs as a separate unit. So business as usual. There will still be Moto Phones. It is only the owner changed hands.

And of coz, the most important pieces is the on going battle between M$ and Moto on Andriod Patents issues.

Also important was Motorolas plan to sue all of the other Android makers.
post #29 of 237
This is nothing but a patent purchase. That is it.

And it was a safe play for Google, because unlike Nortel/Novell's patent portfolio, there was no way Apple would be allowed to buy Motorola (anti-competitive reasons, since they are both handset makers).
post #30 of 237
Quote:
Originally Posted by Wovel View Post

Also important was Motorolas plan to sue all of the other Android makers.

Good point, Samsung and HTC may actually be happy that this happened - will be interesting to see how they respond.
post #31 of 237
Quote:
Originally Posted by addicted44 View Post

This is nothing but a patent purchase. That is it.

And it was a safe play for Google, because unlike Nortel/Novell's patent portfolio, there was no way Apple would be allowed to buy Motorola (anti-competitive reasons, since they are both handset makers).

Still, it is a lot of cash for a patent play, 3 times what the Apple consortium paid. They would want to be making some good returns for the shareholders after splashing that amount of cash.
post #32 of 237
This makes Android look even less appealing to other OEMs. At this point the so-called "Microsoft tax" must seem like a small price to pay to avoid all of the headaches of Android. Of course there's just one little problem -- in order to sell WP7 phones, consumers have to actually be willing to purchase them. So far consumer demand for WP7 has been positively Zune-like. Also, Microsoft is a fairly dysfunctional company at this point. Maybe it's because of the perceived weakness of WP7 that Google thinks it can get away with this. Heck, they're probably right.
post #33 of 237
I think GOOG got suckered into this by a failing Motorola. This is not going to help Android against Oracle or Microsoft.
It will be interesting to see if they will continue the lawsuit against Apple. That suit so far is not going so good for them.
post #34 of 237
Quote:
Originally Posted by gchriste View Post

Still, it is a lot of cash for a patent play, 3 times what the Apple consortium paid. They would want to be making some good returns for the shareholders after splashing that amount of cash.

Bur, Motorolla was getting desperate. They have been losing money for a while now. There is a good chance they would have sued everyone involved in Android.

The threats may well have been an attempt by their board to get purchased at a premium.
post #35 of 237
Fantastic news! Once this goes through Apple can start suing Google directly for their violations rather than the companies that ship their OS!
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post #36 of 237
It may be about patents, but it will definitely undermine 3rd party trust in Google.

It will be very tempting to bring all new developments to Motorola devices first, because Google now can develop hardware and software together.
post #37 of 237
Quote:
Originally Posted by gchriste View Post

And if true, which I suspect it is, shows they think they were in a lot of trouble with there current position, enough to splash $12B at 63% premium worth!

I guess we can now honestly say that they have paid to build Android! lol
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post #38 of 237
*Yawn* ok well Larry and Sanjay just gave us the management blurb with no interesting comments. Larry said that other android makers were happy with the deal, but then he would. Lots of promises of amazing user experiences etc.

Now for the Q&A session, hopefully somebody will ask something interesting
post #39 of 237
Quote:
Originally Posted by Wovel View Post

Also important was Motorolas plan to sue all of the other Android makers.

http://www.engadget.com/2011/08/11/s...ent-royalties/

I think Jha's comments regarding possibly using their patents against other Andrdoid licensees was a message for Google during their acquisition negotiations. If google only wanted the patents (since they have never shown interest in their won hardware) they might have been lowballing their offers for moto. By publicly stating (though barely veiled) to sue other Android licensees, that would strongly motivate Google to up their bid. While Google' weak patent position hurts them and their partners in their competition against Apple and MS, even worse for the platform would be an Android civil war with every vendor expending resources suing, counter-suing and defending . If Google can get enough depth in the IP, then they can offer blanket coverage to their vendors and perhaps 'encourage' them not to fight amongst themselves.

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...sometimes it's both
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post #40 of 237
Quote:
Originally Posted by Bageljoey View Post

Bold move. I wonder what HTC and other Android using handset makers will think about this...

Personally, I see this as the death of Android (or at least it's relegation as a minority OS).

It's only popular because it's used a lot, and the incentive to use it will drastically reduce as everyone else plays second best to Google.

I'm sure they'll attract heavy regulatory scrutiny too, should this be approved.

http://roflbot.tumblr.com/post/89496...y-android-died

It's not like Motorola Droids sold anything even close to that of the iPhone. Android's strength is in numbers, and they will drop FAST!
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