Tuesday, August 16, 2011

Making Money With Google | Google Acquires Motorola Mobility In $12.5 Billion Deal

Google made the announcement Monday that it would gain ownership of the massive smartphone maker Motorola Mobility Holdings. This move marks the first step Google is making toward the ownership and production of not just software for Android mobile phones but also the hardware itself, placing the company in a better position to rival companies like Apple by making hardware that can compete with the iPhone.

The deal, agreed upon by both Google and Motorola, is a direct buy of Motorola for $40 a share: close to $12.5 billion in cash. This sum of money adds up to around a third of Google's cash stores, making the move Google's largest to date.

While Google is buying out Motorola, the company has stated it intends to leave its former Android business partner as a separate company from Google itself. Motorola will continue to run its own operations, and the disappearance of the Motorola name is unlikely. According to Reuters , "the deal will likely close at the end of 2011, or the beginning of 2012, after required regulatory approvals in the U.S., European Union and other areas."

With the acquisition of Motorola, Google will venture into an unknown world: the production of the hardware that its operating systems, specifically the Android System, run on. This will allow Google to achieve something Apple has already come to master, tailoring phones and hardware to provide users with the best mobile experience possible, including everything from how it fits in their hands to how it performs as an Android phone.

Fast Company states that "Making phones in-house means a Google Droid phone will likely have better battery life, slicker performance, greater reliability, and fewer bugs, which is exactly what Google needs to rival Apple, with its iron-fist control over seamless integration of software into custom-crafted hardware."

While this purchase will undoubtedly leave Google as a forerunner in the Android market for smartphones and tablets, the company has stated the acquisition of Motorola will not seriously affect Google's relationships with the other companies that host the Android operating system on their smart phones. In fact, Google has stated its android OS will still be available to these companies and they hope that the partnership of Google and Motorola will allow the Android market to flourish beyond the levels it has already achieved.

Motorola's history has had its ups and downs, and now users of the Motorola phones, and of Google, can have high hopes and expectations from this relationship. From the company that brought the world the bestselling clamshell phone to date (the Razr, with over 30 million units sold) to the software super-giant that has companies transforming the way they do business online (with GMail and Google Docs), we can eagerly expect to see the next step in smartphone technology. The only question left is: How long will we have to wait?

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