Google To Buy Motorola Mobility, Promises to Keep Android Open

Google Inc. is about to become an even bigger force in the U.S. wireless market by acquiring Motorola Mobility Holdings, Inc. in a $12.5 billion pact.

Google, which owns the Android operating system that is incorporated in many popular smartphones today, on Monday announced it is acquiring the storied mobile device maker for $40 per share in cash, representing a premium of 63 percent to the closing price of Motorola Mobility shares on Friday.

We expect that this combination will enable us to break new ground for the Android ecosystem,” said Andy Rubin, Googles senior vice president of Mobile, in a statement. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community.”

The deal will make Google an actual supplier of handsets and other wireless products like the Motorola XOOM tablet not just the proprietor of the operating system that runs such devices. In the second quarter, Motorola Mobility posted revenues of $3.3 billion and shipped 11 million mobile devices, including 4.4 million smartphones and 440,000 XOOM tablets.  

Mountain View, Calif.-based Google and Libertyville, Ill.-based Motorola Mobility expect the sale to close by the end of the year or early 2012 following customary closing conditions, including regulatory approvals and the approval of Motorola Mobilitys stockholders. 

Google plans to run Motorola Mobility as a separate business, and Motorola Mobility will remain a licensee of Android.

Google, which had on hand $39.1 billion in cash, cash equivalents and marketable securities as of June 30, 2011, also is said to be a potential suitor for Hulu, the website that streams television shows and other entertainment content.

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