Google to buy Motorola Mobile for US$12.5 billion

Google has bought Motorola's mobile arm for US$12.5 billion (A$11.9 billion).

It is a key strategic move for the tech giant as it seeks to fend off what it sees as a concerted campaign against it by rivals such as Apple and Microsoft.

Last month the two companies were part of a consortium of tech companies which bid for and won 6000 key patents from failed communications vendor Nortel. Speculation followed that Google was deliberately not invited to the party.

However, as part of the deal announced last night the search engine giant would own Motorola's 17,000 patents and 7000 pending patents which it hoped would help protect it from possible patent claims stemming from the Nortel portfolio, especially those relating to wireless communications.

Last year the communicatons company split itself into two divisions; Motorola Mobility and Motorola Solutions. The latter was not part of the deal announced overnight, however observers have pointed to the possibility of brand confusion if both companies decide to use the Motorola name.

Also, a leading US analyst decribed the deal as “naive at best” pointing to the potential for licensing conflicts between mobile manufacturers.

Google said Motorola Mobility would operate as separate business to help "supercharge the Android ecosystem".

"Motorola Mobility’s total commitment to Android has created a natural fit for our two companies," said Google chief executive Larry Page.

"Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”

The board of directors for both firms have approved the deal, which is still subject to the usual regulatory approval process both in Europe and the US. Motorola Mobility shareholders also have to green light the deal, which is expected to close by the end of this year or early next.

Motorola Mobility’s total commitment to Android has created a natural fit for our two companies.

"This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world," said Sanjay Jha, Motorola Mobility's chief executive.

"We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”

Google remains firmly committed to Android as an open platform and a vibrant open source community.

The companies were keen to stress that the Android platform will remain open and that Motorola Mobility will continue in its guise as an Android licensee.

“We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community," said Google's senior vice president of mobile, Andy Rubin.

"We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

This article originally appeared at itpro.co.uk