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Google Completes Motorola Mobility Acquisition

This morning, Google CEO Larry Page announced that the search giant had completed its acquisition of Motorola Mobility. According to the blog post, Motorola Mobility CEO Sanjay Jha will be stepping down to be replaced by Googler Dennis Woodside and that trading of Motorola Mobility stock will cease immediately. The deal, which was originally announced back in August, is reported to have cost google a cool $12.5 billion. That’s some serious scratch to buy a failing phone-maker.

To give a little background, Google is only acquiring Motorola Mobility — the cellphone-making arm of Motorola, Inc. that was spun off from the company in 2008. Though it had made great strides in bringing the cellphone mainstream, and built those Razr phones that everyone had in the early 2000s, the company had fallen on hard times towards the end of the decade. Famously, it lost over a billion dollars in 2007 alone.

In August, Page announced that the deal would “supercharge” the Android OS, which Motorola had supported since early on. From that announcement:

This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.

Page went on to say that the acquisition would also strengthen Android’s patent portfolio. This could be a key point, as the smartphone biz has been embroiled in various lawsuits as of late.

Today’s announcement did not delve into the specifics of how the newly acquired business would be run, but focused on top-level staffing changes. Page lauded incoming CEO Woodside for his years at Google, where he helped expand Google’s business across Africa, Eastern Europe, the Middle East, and Russia. Page also notes that while serving as the President of the Americas region, Woodside raised revenue t0 $17.5 billion — an increase of some $6.7 billion.

However, Page did end his announcement with this message, which may give a glimpse into how Motorola will fit into the future of the Android universe:

It’s a well known fact that people tend to overestimate the impact technology will have in the short term, but underestimate its significance in the longer term. Many users coming online today may never use a desktop machine, and the impact of that transition will be profound–as will the ability to just tap and pay with your phone. That’s why it’s a great time to be in the mobile business, and why I’m confident Dennis and the team at Motorola will be creating the next generation of mobile devices that will improve lives for years to come.

Sort of sounds like Motorola will be taking the place of Google’s attempt at selling smartphones directly. I wouldn’t be surprised if we start seeing Google innovations rolling out first onto Motorola devices, setting it as the poster child for Android. It could also be an effort to solve the problem of forked Android devices — like the Kindle Fire — which use the operating system, but lack much (if any) Google integration.

Speculation aside, it should be very interesting to see where Motorola goes from here.

(Google Blog via Techmeme)

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