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Google to acquire Motorola...Whoa!

Google and Motorola today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for a total of about $12.5 billion in cash. The news is a shocking turn for the fast-growing Android ecosystem, which was built off of Google’s operating system but did not include any actual hardware built by the company. Soon Google will have a hardware platform that it controls and could offer the sort of integrated hardware-OS package that Apple is famous for.

Google co-founder and CEO Larry Page writes in a blog post, that Google has acquired Motorola not only because of its strength in Android smartphones and devices, but also for being a “market leader in the home devices and video solutions business.” It’s also a move to build up the company’s patent portfolio, he adds, as it will “enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies”. According to Motorola Mobility’s website, the company holds approximately 14,600 granted patents and 6,700 pending patent applications, worldwide, as of January 2011. Google also gains a strong foothold in the living room with Motorola’s set-top box business, which could help its lackluster Google TV efforts.

Motorola has a history of over 80 years of innovation in communications technology and products, and in the development of intellectual property, which have helped drive the remarkable revolution in mobile computing we are all enjoying today. Motorola Mobility is what used to be the Mobile Devices division of Motorola until January 2011. Few years ago, Motorola bet its future in the mobile devices market by going full Android as one of the earliest supporters and helped kick start the momentum for the OS with the Droid handset launch in Nov. 2009. The “Droid X” and “Droid 2" followed in 2010.

Here’s the other important part of the PR (why and what happens to Android now):
The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

Here's what the head honchos had to say about this historical move:

Larry Page, CEO of Google, said, “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. 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.”

Sanjay Jha, CEO of Motorola Mobility, said, “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. 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.”

Andy Rubin, Senior Vice President of Mobile at Google, said, “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. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

Now, we’ll have to see how if this adds momentum to Android or saps it. Will it be worth for Google to get more patent protection and its own hardware maker, or could this slow down the Android Express and perhaps give Android partners another reason to hedge their bets and look at Windows Phone 7?

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