Google Buys Motorola for $12.5b in an Effort to Fend Off Patent Attacks

Posted by at 6:04 am on August 15, 2011

Google orchestrated one of the biggest upsets in the mobile industry on Monday after it bought Motorola Mobility for $12.5 billion. The deal will keep Motorola as a separate business and will reportedly keep Android relatively open. Both called the deal mutual and expected it to clear in late 2011 or early 2012 if approved.

The search firm made it clear that the deal was less to get direct control of a hardware maker and more to defend itself against an increasing number of patent attacks against Android that it has cast as anti-competitive. Google owns few patents of its own and, since it was previously only giving away free OS licenses to outside companies, couldn’t be directly sued for financial damage. The deal makes Motorola’s patents Google’s own and effectively pits Apple and Microsoft lawsuits directly against Google rather than targeting the company through proxy battles with its partners.

“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” CEO Larry Page said.

Although not stated, the move may have been spurred on by Motorola’s hinted inter-Android lawsuits. The phone maker’s chief Sanjay Jha had touted the strength of his company’s patents and that other Android supporters might be targeted as Motorola tried to lower the cost of its phones. Google making the deal takes this possibility off the table.

From a practical standpoint, the deal could mean the end to Motorola’s customization of Android, Motoblur, on its devices as well as a change to who makes reference Nexus phones. Although it will ostensibly be a separately-run company, Motorola will now be the official showcase for Android and will likely be pushed to run the latest, stock version of the OS on at least some if not all of its devices. It would undermine Google if its own hardware maker contributed to the fragmentation of the platform.

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