Holy crap, Google buy Motorola!

[Mise]

http://investor.google.com/releases/2011/0815.html

http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html

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.

Just... wow. I'm guessing this is to do with patents?

 

[civ_king]

They better not kill the Droids, I need a QWERTY keyboard

 

[Zelig]

I don't know how much this actually accomplishes...

Motorola was already Android-exclusive (although with some potential of putting out WP devices).

Motorola hasn't had any best-in-class Android devices in ages. (Compared to HTC and Samsung.)

Microsoft was already suing Motorola for patent infringement.

They better not kill the Droids, I need a QWERTY keyboard

I thought this for a long time, but recently switched to a 4.3" WP device with no physical keyboard, and find typing on the touchscreen to be just fine.

 

[Souron]

Microsoft was already suing Motorola for patent infringement.

This could well be the reason for it. With Google behind it, Microsoft will have to back away or risk getting sued by Google with whatever defensive software patents they can. Microsoft could sue back of course, but neither company would want to get into a patent war.

 

[Mise]

It apparently had a very large "back out fee", so that google had to pay $2.5bn if they decided to back out of the deal (Motorola only has to pay $300m or something if it decides not to sell). So it looks as though (a) Motorola didn't think the deal would actually go through, and (b) Google were pretty desperate to show they were commited to making the deal go through. Which means they're very confident that they'll get regulatory approval.

It still looks like desperation on Google's part though. I doubt anyone would buy MMI on its business fundamentals.

 

[mdwh]

Just... wow. I'm guessing this is to do with patents?

The obvious thing seems to be hardware - whilst Google have made their own phones, they tend not to have been too successful AFAIK. Now they can have an established company making Android phones, that they have control over. (Although Motorola are a lot less successful as a phone company than they were - but still, with 9.3 million devices shipped in Q1 2011, they're not that far behind even Apple.)

And yes, maybe you prefer HTC or Samsung for Android phones, but I suspect they weren't up for sale...

 

[Padma]

The real story:

It was just another morning when Larry Page Google Corp. CEO realized that he lost his phone. When he got to the office he said to his executive assistant "Buy me a motorola please."

After a few hours assistant reports "Mission accomplished I have purchased a Motorola for You". "Which model..." asked Larry... "Model?" replied assistant?

 

[classical_hero]

Very good.

 

[GoodGame]

+1 Padmus. That's an expensive cell phone replacement plan.



Seriously, I don't like how Google's stock is dipping just because the world fears that Google will try to go 100% vertical and no longer sell services to other companies' PDA-phone gizmos.

 

[Zelig]

Seriously, I don't like how Google's stock is dipping just because the world fears that Google will try to go 100% vertical and no longer sell services to other companies' PDA-phone gizmos.

I like that Google's stock is dropping because it's overvalued.