Google to buy Motorola Mobility for $12.5 billion

August 15, 2011 4:51:01 PM PDT
Google made its biggest acquisition ever Monday, buying Motorola Mobility for $12.5 billion. The implications are huge for everybody with a cellphone.

The acquisition is big because it puts Google in direct competition with Apple. Like Apple, Google will now make smartphones as well as the operating system that they run.

For consumers, the Google-Motorola deal is probably going to raise the bar for smartphones using Android. Google developed the Android operating system as open source, meaning any mobile phone maker can use it. More competition is likely to yield better devices.

"The hope is that the other manufacturers will say, 'Well, there's competition from Google, but we have to make ours better,' or, that they'll say, 'We are not going to mess around in terms of delivering operating system upgrades,'" CNET Executive Editor Molly Wood said. "That's been the big complaint is that you can buy three different phones with three different versions of Android."

Google is not talking on camera, but CEO Larry Page wrote on the company's blog that "...we will create amazing user experiences that supercharge the entire Android ecosystem."

For $12.5 billion in cash, Google is also getting ownership of 17,000 Motorola patents and 7,500 patents pending.

"They certainly get this new technology that with all these patents because, I think it's important to remember, that patents are not just pieces of paper, they represent technology," technology patent consultant Bob Zeidman said.

Google joins Apple in snapping up other companies' patents for another reason -- to make lawsuits more difficult that claim patent infringement.

Tech analyst and futurist Paul Saffo says it will free Google and Apple from distractions from what he calls "patent trolls."

"When Apple has over 6,000 patents from Nortel and Google has probably over 21,000 patents, assuming they all issue from Motorola in both mobile and television, I think what it means that we're going to see some real innovations out of those two companies," Saffo said.

Google also gets the Motorola Xoom tablet and a major maker of set-top TV boxes for cable and pay television services. Acquiring Motorola's set-top boxes could be especially important for Google. Google has been trying to bring the Internet into the living room with Google TV, but that initiative has fallen flat.


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