Google acquires Motorola Mobility and its over 17,000 patents

Mobile Commerce Industry

Mobile Commerce Industry
Many high-tech experts were surprised by Google’s latest acquisition bid of $12.5 billion for Motorola Mobility, an Android phone manufacturer.

The all-cash, $40 per share deal comes at a premium of 63 percent. Google has announced that if the deal closes in 2011 or at the beginning of 2012, it will be running Motorola Mobility as its own company. Should the deal close, Google will be receiving more than just a cell phone manufacturer.

The first major thing that it will obtain is patent protection, as Motorola currently holds over 17,000 patents, including those for the technologies of 3G and 4G wireless, in addition to patents that are non-essential but that will provide the search engine giant with significant defense in a marketplace that is growing in its litigiousness.

Next, Google will have the ability to create its own hardware for a closed, integrated system in case it ever wishes to do so. According to Michael Gartenberg, an analyst at Gartner, “They now have a mobile hardware business and they have tight integration into their software platform.”

Through this acquisition, Google would also be receiving the Motorola business for set-top boxes, which could – if they so desired – be used to help strengthen their Google TV web television services that hasn’t been entirely successful as of yet.

The two latter advantages, though beneficial, were not the primary reason that Google wants this deal. This acquisition is mainly for the patent protection it provides. Google has already seen legal struggles regarding patent infringement, including one that is still in progress where Oracle has sued over the use of Java technology in Google’s mobile operating system, Android.

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