Google Buys Motorola Mobility

August 19, 2011 3:10 pm 0 comments

Google Buys Motorola Mobility

Google Inc. has potentially secured a deal worth $12.5 billion to buy the mobile phone giant Motorola, and it’s the search giants biggest acquisition to date.  Not only does this move secure Google’s place as a mobile super power, but will also help them fight for patent supremacy against their biggest rivals, Apple and Microsoft.

Not only will Google’s workforce be expanded by almost 100 percent, the acquisition also means the internet company can now manufacture its own smartphones, tablets and even set-top boxes.  Motorola, in effect, invented the mobile phone as we know it today, and this deal provides Google with an additional 17,000 patents, which will no doubt be used to defend itself against lawsuits attacking their Android software – currently being used in approximately 150 million handsets worldwide.

Google Rescues Motorola

Motorola, the former radio maker, lost an incredible $4 billion due to its ailing mobile business between 2007-09.  In January 2011, the company was split in two; Motorola Inc., which specialises in wireless communications for governments and companies was separated from Motorola Mobility, which focuses mainly on handsets and mobile devices.

If the deal goes through, Google will become a potent superpower in the world of patents.  Companies use patents to protect the use of inventions and technologies by other companies, which of course helps to retain market share.  Android is already experiencing this, as a rash of lawsuits have already been filed by Apple.

So Sue Me

With the purchase of Motorola Mobility, Google will put itself in the middle of big lawsuits already being filed between Apple and Microsoft.  Microsoft is currently suing Motorola, which could lead to the newly acquired mobile device maker being banned from importing its phones into America.  In a retaliatory move, Motorola is counter-suing, which in turn could lead to an import ban on Xbox consoles.

Google Still Faces An Obstacle

Before the deal is fully completed, however,  Google must wait on the Justice Department’s Anti-trust Division to review the proposed purchase.  With the purchase, Google will not only control the fastest growing operating system used on mobile devices, but will also become a major manufacturer, and this, in some peoples eyes is seen as a potentially unfair advantage.  Larry Page, Google co-founder, however, was quick to point out that Motorola Mobility Holdings Inc. would be operating separately from Google and would receive no advantages over other handset makers.

Whatever happens, the acquisition has undoubtedly done no harm to Mobility’s share prices, which jumped 56%, to just under $40 on August 15th.

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