Search giant Google announced a major move into the mobile device space on Monday with a $12.5 billion purchase of Motorola Mobility Holdings.
The deal, announced Monday morning, puts Google into the mobile handset manufacturing game and gives the company an arsenal of valuable patents for its mobile handsets and tablets. Google said it would pay $40.00 per share in cash, for a total of about $12.5 billion for the company.
Motorola Mobility spun off from parent company Motorola Inc. in January. The transaction was unanimously approved by the boards of directors of both companies and represented a premium of about 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011, Motorola said in a statement.
Motorola Mobility is a Google partner that makes the Droid and Defy smart phones which run Google’s Android operating system. In a statement, the companies said that the deal will “supercharge the Android ecosystem” and improve competition in the mobile computing marketing. Google said that it will continue to offer Android as an open operating system after the deal, with Motorola Mobility operating as a separate entity within Google and continuing as a licensee of the Android operating system. In a statement, Google CEO Larry Page said that Motorola Mobility was a good fit for Google because the company had “bet big” on Android and had a “total commitment to Android in mobile devices.” “Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers everywhere,” Page wrote.
However, reports note that Google may have chosen Motorola as much for its stable of 17,000 patents as for its commitment to the Android OS. In recent months, Oracle has filed suit against Google for patent infringement with Android.
The deal is Google’s largest to date by a factor of four. In 2007, Google spent $3.1 billion to acquire ad network DoubleClick, the company’s largest acquisition to date.
One question that the acquisition raises is the impact of the Motorola acquisition on the security of Android devices. In recent months, Google has been hit hard by reports of malicious programs in its Android marketplace, including the DroidDream Trojan. Stay tuned for more Threatpost coverage of Google’s purchase of Motorola Mobility.