By now you may have heard Google has purchased Motorola Mobility, the consumer electronics division of Motorola. In a $12.5 billion deal, Google agreed to pay $40 per share in cash, over 60 percent more than the stock’s value at the time. However, last week, the big question on everyone’s mind was Why?
Speculation began as soon as the news hit last Monday, rekindling all the old “Google phone” hardware rumors across the social stratosphere. It opened further discussions of what Google’s commitment to other manufacturers of Android devices and their commitment to keeping Android an open platform.
Through their press release and mini site, Google has certainly repeated their commitment to protect competition and the continuation to keep Android open source. There’s even quotes from Android OEMs, offering their support of the Google-Motorola Mobility acquisition. The quotes include principals from Samsung, HTC, LG, and Acer to name a few.
Amid all the speculation, Standard & Poor’s downgraded Google’s stock value to a “sell” rating for the first time in Google’s publicly traded history. The S&P changed that recommendation to “hold” yesterday. Throughout all the speculation the same, one-word answer to the question of why kept appearing: patents.
Motorola mobility has over 14,000 patents and another nearly 7,000 pending, all of which help protect Google’s Android mobile OS platform and all the Android hardware OEMs from the plethora of lawsuits filed by Apple, Microsoft, and others trying to gun down the Google juggernaut.
As Bloomberg reported, there are 18 specific patents Motorola Mobility owns that can help Google battle current litigation. These patents have already been used previously when Motorola Mobility “picked a fight” with Apple, issuing three lawsuits of their own. Those lawsuits targeted more than Apple’s iPhone. It also targeted iPad, AppleTV, and even the MacBook Air. Four of those 18 patents were also used against Research in Motion, resulting in the BlackBerry manufacturer to pay royalties, too.
If the patents and potential to stave off current and future lawsuits wasn’t enough, eWeek noted a few more interesting facts: Motorola is the leading manufacturer of set-top boxes used by major cable services. Google now has a new in to pushing GoogleTV more mainstream.
Google still needs to pass the Federal Trade Commission’s white glove test. The FTC antitrust probe of Google is already in the works. Will this impact what they do? Time will tell.