Google Closes Motorola Mobility Deal, Names CEO For The Business12:57 PM EST Tue. May. 22, 2012
After nearly nine months of legal reviews, Google said Tuesday it has officially acquired handset maker Motorola Mobility in a $12.5 billion deal.
The news, which was made public in a company blog posted by Google CEO Larry Page, comes just three days after the Internet giant cleared its final regulatory hurdle in China. It gained the approval of European and U.S. antitrust authorities in February, after initially announcing its plans for the merger in August.
Page positioned the acquisition, which will grant the company rights to Motorola's full IP portfolio, as a means to broaden Google's footprint in the booming mobile market.
"The phones in our pockets have become supercomputers that are changing the way we live. It's now possible to do things we used to think were magic, or only possible on 'Star Trek' -- like get directions right from where we are standing; watch a video on YouTube; or take a picture and share the moment instantly with friends," Page wrote. "It's why I’m excited to announce today that our Motorola Mobility deal has closed."
Merger aside, Google has already staked a claim in the smartphone market with Android, its homegrown mobile OS that fuels a variety of devices from handset makers including Samsung, HTC and Motorola. In August, when Mountain View, Calif.-based Google first went public with its plans for the merger, it vowed to keep the Android OS an open platform and to avoid any exclusivity agreements with smartphone manufacturers, including Motorola.
Chinese authorities only agreed to green-light the acquisition this weekend under the conditions that Google could commit to keeping Android open for the next five years. Google assured officials that its "stance" on the Android topic had not changed since August, and that its new Motorola Mobility unit would operate independently of its software unit.
Android has historically been neck-and-neck with Apple's iOS in a race toward smartphone dominance. But according to mobile market research firm comScore, Google pulled ahead in January, accounting for nearly 48.6 percent of the U.S. smartphone subscriber market, compared to Apple's 29.5 percent. The fact that Android runs on a variety of smartphones, while iOS runs exclusively on the iPhone, could account for Google's lead.
According to Douglas Grosfield, president and CEO of Xylotek Solutions, an Ontario-based solution provider and Motorola partner, the competition, which is sure to be fueled by Google's newly acquired Motorola patents, is a good thing.
"The race is only just beginning, and so long as there is this level of competition, customers and partners alike will all enjoy the continued innovation and enablement -- to say nothing of profit -- for a long time to come," Grosfield told CRN.
Page also announced in his blog the resignation of longtime Motorola Mobility CEO Sanjay Jha, who he said was "responsible for building the company and placing that big bet on Android." Dennis Woodside, former president of the Americas region at Google, will take over Jha’s role.
This announcement comes on the heels of a wave of reports Monday speculating that layoffs would be an imminent offshoot of the Google-Motorola merger. Google said there are no plans being announced at this time.
"Regarding rumors of layoffs, on background, there are no additional changes on the day of close, and we aren't going to speculate about future plans," a spokesperson wrote in an e-mail to CRN.