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Google to buy Motorola for $12.5bn

 Google to buy Motorola for $12.5bn 15th August 2011

We have been predicting for a while that Motorola's handset business might be a target for a takeover, so it perhaps isn't a shock to see that someone actually has bought them.. the shock is that the buyer is Google who are prepared to pay a staggering $12.5bn for a company that has struggled to survive in recent years.

Although Google is a very acquisitive company, almost all the companies that it has bought have been in the internet, software and services sectors. So, buying a hardware manufacturer seems odd at first, but one thing that Motorola does have is a massive patent portfolio that may well help Google to secure the future of the Android platform and its other endeavours.

Although this is undoubtedly very good news for Motorola (shares are up 50% on the news of this offer), Google themselves are taking a massive gamble with their largest ever buy. But perhaps most importantly, other Android manufacturers have been left in a very difficult position.

If you go back a few years to the launch of the Google Nexus One smartphone, you may recall that many manufacturers were unhappy that Google seemed to be muscling in on their business. Up until that point, Google's approach with Android had been very similar to the way that Microsoft did business - the software vendor stuck to the software and treated all the hardware manufacturers equally. That was a row over one phone - with this move Google have bought an entire company.

On the face of it, Google's other partners are supportive, coming out with a number of quotes from HTC, Samsung, LG and Sony Ericsson saying that they "welcome" this change, but the forced nature of the support sounds rather like an "I for one welcome our new overlords" meme.

It's not just Android partners that this might impact. There have been some rumours for a while that Microsoft might buy their new partner Nokia, but these have been rejected as being too far-fetched.. until now.

Subject to regulatory approval, the deal will close in late 2011 or early 2012.

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