Like the rest of the blogosphere, we were rubbing our eyes and drinking our morning coffee when Google announced their planned acquisition of Motorola Mobility. Now that the furor has died down a bit, let's have a recap of the mornings events, all in one place for easy reference and discussion. hit the break, and we'll try to ask and answer all the questions.
Who’s buying who now?
Google is purchasing Motorola Mobility, Motorola’s smartphone manufacturing business, for $12.5 billion. It’s the mobile end of the split Motorola went through last year. (The other half is Motorola Solutions.)
What's the deal worth?
Google’s paying $40 per share in cash, a premium of 63 percent on the closing price of Motorola Mobility shares on Friday, August 12, 2011.
The acquisition gives Google control of Moto’s massive patent catalog, which consists of 17,000 awarded patents, with a further 7,500 pending.
Is this deal final?
Nope. While there is surely a "back-out" clause (with a chunk of change attached) in any preliminary agreement, Motorola is free to decline for now. There's also the matter of government approval -- expect the usual suspects to cry foul, and claim that Google should be blocked from buying a hardware company and it's patents. Thankfully, Apple and RIM buying the Nortel patents sets a nice precedent here. Ultimately, it will be up to the lawyers to sort it all out, but Google certainly considered this before making the offer.
So Google will totally control Motorola phones now?
No, Motorola Mobility will be run as a separate company, and it’s highly unlikely we’ll see any major changes in direction from Moto even after the deal completes. Motorola phones will likely continue to ship with Blur, and locked bootloaders depending on carrier preferences.
Motorola’s position as a smartphone manufacturer and Open Handset Alliance member won’t change, nor will it be given preferential treatment by Google over other OEMs.
What’s this mean for Android’s other partners?
Google has made it clear that this deal is about “protecting the Android ecosystem.” This means the big G cares more about defending itself, Android and other partners against litigation than attempting to directly compete other Open Handset Alliance members (which wouldn’t make a whole lot of sense anyway).
Samsung, HTC, LG and Sony Ericsson have all put out statements welcoming Google’s acquisition of Motorola Mobility, emphasizing the deal’s importance in protecting Android and its ecosystem. Regardless of whatever private reservations they may have, all the big Android manufacturers are publicly standing behind Google and Motorola right now.
How about the Nexus phones? Will they all be Motorola now?
No, Google has made it clear that the process of selecting a manufacturer for “Nexus project” devices will not change. This means Moto is no more or less likely to have been selected as the manufacturer of the next Nexus phone as a result of this deal.
So why’s Google really buying Motorola? Is it all about the patents?
We think so. All of today’s official statements have focused on “defending” Android, “protecting” its ecosystem and enhancing competition. In today’s conference call, Google execs repeatedly expressed their desire to have Motorola Mobility run as a “separate company” with minimal interference from Google.
However, owning Motorola Mobility’s patent portfolio gives Google the ability to protect itself (and potentially other OHA members) from what it’s described as “anti-competitive threats” from the likes of Apple and Microsoft.
Does this mean the end of the patent war?
Not hardly. Importantly, though, Moto’s patent portfolio will serve to discourage future litigation or patent demands. The patent war will continue to rage for the time being, however Google’s acquisition of Motorola Mobility means that it (and by extension every Android manufacturer) is in a much stronger position than it was 24 hours ago.
What does this mean to other Google’s other Android ventures?
As we saw at Google I/O, Google has big plans for Android that don’t necessarily involve phone hardware. Android@Home, where small appliances and other home equipment are controlled remotely will also benefit from engineers newly acquired from Motorola. While the mobility division engineers may not have worked directly on them, they will have a pretty good understanding of Motorola’s many types of chips and controllers, which could be used in any hardware. And set-top boxes like Google TV? Check your cable box or DVR -- there’s a good chance it was made by Motorola, and if not it was built with tech licensed from a Motorola patent.
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