By JR Raphael (@jr_raphael)
Wow -- talk about a surprising way to start the week.
Google shocked most of the tech world Monday morning by announcing it had agreed to buy Motorola Mobility. That's right: The company that famously doesn't make hardware is now on its way to owning one of the most prominent makers of mobile devices.
Google's made one thing clear: This Motorola-buying move is all about the patents. But clearly, there are plenty of other potential implications -- and plenty of people wondering what this merger will really mean.
Here are answers to all of your burning questions.
What exactly happened with the Google-Motorola acquisition?
Google and Motorola Mobility entered into a "definitive agreement" for Google to purchase Moto's mobile hardware business. Google paid $12.5 billion, making the deal its largest to date. The price breaks down to $40 per share, which is 63 percent above the level Motorola Mobility closed at on Friday.
So this is a done deal, then?
Not yet. The Google-Motorola acquisition still has to go through all the usual rounds of regulatory approval, both in the U.S. and abroad. Google and Motorola Mobility aren't anticipating a long road: The two companies say they expect the deal to be closed by the end of this year or early next year. That may be an optimistic view, of course; there's little question the companies will face some intense antitrust grilling before any type of approval is granted.
Why does Google want to buy Motorola Mobility?
One can imagine many reasons, but in Monday's press call, Google execs went to great lengths to emphasize that the focus is squarely on patents. Google, as you've probably heard, has been in the middle of a very bitter battle over smartphone patents. Microsoft and Apple's recent purchase of patents from Novell and Nortel seemed to be the straw that broke the camel's back; not long after that move, Google Chief Legal Officer David Drummond wrote a scathing blog post in which he said the companies were "banding together" to use "bogus patents" as a "weapon to stop" innovation, citing the numerous lawsuits against Android hardware manufacturers as evidence.
"Our acquisition of Motorola will increase competition by strengthening Google's patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies," Google CEO Larry Page wrote in Monday's announcement.
With the Motorola Mobility buy, Google gets a whopping 17,000 patents under its belt -- nearly three times the amount collected in the Novell and Nortel deals combined. Moto also has about 7,000 other patents currently pending, according to its CEO's remarks during the company's earnings call last month. Altogether, that appears to fulfill Google's previous promise, as expressed by Drummond, to "strengthen [its] own patent portfolio" and "reduce the ... threats against Android."
What about other Android manufacturers? Does Android now become a one-player game like the iPhone?
Not at all: According to Google, nothing will change in terms of Android's open approach to mobile development. During Monday's press call, Android head honcho Andy Rubin said he had talked to the "top five licensees" of Android software and that they "all showed enthusiastic support." Samsung, Sony Ericsson, HTC, and LG all issued their own statements of support as well, though it's hard to read too much into that type of bland and carefully crafted PR-speak.
According to Rubin, "Android doesn't make sense to be a single OEM." And he's right: It's Android's multimanufacturer, choice-driven approach that's been a key factor in its meteoric rise within the mobile market. Phones like Samsung's Galaxy S II and original Galaxy S have played a huge role in helping Android sales skyrocket. Google would be crazy to throw that all away; its challenge now will be finding a way to run Motorola without making everyone else feel like they're at an extreme disadvantage. If Monday's remarks are any indication, Rubin seems to be up to the challenge.
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"We expect that this combination will enable us to break new ground for the Android ecosystem," Rubin said. "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."
Okay, so how will Google run Motorola?
Google promises it'll run Motorola as a separate business. In Monday's press call, Rubin explained it like this:
"Motorola was one of the early [Android] licensees. After the transaction, nothing changes -- it's business as usual. It's about protecting and extending the ecosystem."
So we won't see a "Google-made" phone, then?
Right -- that's what Google is saying. In the press call, Larry Page reiterated that Motorola would be building its hardware like it does now and would remain a licensee of the Android OS.
"There are competencies that aren't core to us, but we plan to operate [Motorola] as a separate business, so they have competency there," Page said.
What about Google's Nexus phones? Will Moto now make all of those?
Negatory. Rubin says Google's Nexus strategy will remain exactly as it is now, with multiple manufacturers working on concepts and "bidding" to be the official partner for each release. Motorola will continue to be a part of the process following the acquisition, Rubin indicated, but will have no inherent advantage over other manufacturers.
Will Motorola's Motoblur skin go away now?
Hey, we can dream, right? Thus far, though, neither Google nor Motorola has commented on the future of Motoblur or whether Motorola phones will ultimately become stock Android devices. At this point, there's really no sign of anything like that occurring; Google repeatedly emphasized that Motorola would be run as a "separate business" and that everything would be "business as usual." Google also discussed the ongoing plans for its Nexus line of devices, which stand out from the pack because of their "pure" approach to the Android OS.
I could certainly see Google/Motorola starting to offer some stock devices in the future -- I really hope that'll be the case -- but I wouldn't count on Blur completely vanishing into the ether anytime soon.
What could the Google-Motorola Mobility deal mean for hardware outside of smartphones and tablets?
Why, I'm glad you asked: Google's Motorola Mobility buy could give it a much-needed leg up in the realm of home TV technology. While Google's Android-based Google TV platform has been off to a slow start so far, Motorola Mobility has a pretty significant set-top cable box business, and that has to count for something.
Only time will tell what exactly will come of the partnership in that area, but one would imagine that the opportunity won't go untapped.
Will Motorola change its name to Googorola?
No, although that would make a fine name for a fictional monster and/or health food product.
Got it. Speaking of food, can we have Ice Cream Sandwich already?
Soon enough, my friends -- soon enough. According to the latest (unofficial) intel, Google's Ice Cream Sandwich edition of Android could be here as early as October. One way or another, we should be tasting it before long: Google has always said it intends to ship ICS within the fourth quarter of the year.
I like ice cream.
As do I. But that isn't a question, and it has nothing to do with the Google-Motorola deal, which is what we're actually discussing.
I scream, you scream, we all scream for ice cream.
Um, okay. So no other real questions, then?
What would you do for a Klondike bar?
Right -- I think we're done here.
JR Raphael writes about smartphones and other tasty technology. You can find him on Facebook, Twitter, or Google+.
Article copyright 2011 JR Raphael. All rights reserved.