Holy crap - Google buying Motorola

Posted on Monday, August 15th 2011 at 1:15 p.m.

Multiple outlets are reporting that Google has announced a deal to purchase Motorola for $12.5 billion, bringing it directly into the handset/tablet business.  Google’s acquisition also gives it access to Motorola’s patent library, which will either enable it to defend Android from lawsuits or go on the offensive.

Google’s Larry Page created a blog post explaining Google’s motivation for the deal - here are the key points:

  • Page loves Motorola handsets;
  • Motorola was a founding member of the Open Handset Alliance and went all-Android in 2008;
  • Motorola is a market leader in home devices and video solutions;
  • Google will continue to run Android as an open platform;
  • Google is still upset about Microsoft and Apple’s purchase of the Nortel patent library  ;
  • The acquisition will enhance competition, offer consumers more choice, blah blah blah.

There are some interesting factors to consider in this sale.

In spite of Page’s assertions, HTC and Samsung cannot be pleased with this development.  There are a number of possible ways in which Motorola could benefit from the Google partnership - priority on new Android OS releases, Android tweaked to work best on Motorola devices, Motorola-exclusive content in the Marketplace.  Google has a history of doing things differently, but in a world where these sorts of deals usually result in some kind of “corporate synergy,” I’ll believe Page’s comments when I see how Motorola behaves in the future.

Another question is whether Google is frustrated with Android’s market share in the tablet space.  Android has yet to see a “hit” tablet and many tech journalists think of the iPad as the only viable tablet option.  Could Google be trying to take the reins in order to ensure that a quality Android tablet experience can be had and Android can capture the tablet market like it has with handsets?

One other interesting item is Page’s comment about Motorola’s place in home devices and video solutions.  Motorola is a leading manufacturer in digital set-top boxes used by cable companies and satellite providers.  With Google now owning Motorola, could Google finally get GoogleTV off the ground after its lackluster experiences with the Logitech set-top box?

This is definitely a bombshell announcement that will warrant further analysis.  Stay tuned.

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