Google +1s Motorola for £7.7 billion

16th August, 2011 - 3 minutes read

Yesterday Google announced that they had reached a deal with Motorola Mobility which will see the internet giant purchase the handset developer and manufacturer at a cost of over $12 billion. In a joint statement released on Motorola’s website the two companies claimed that the deal would Supercharge Android, Enhance Competition, and Offer Wonderful User Experiences. The sale was excellent news for shareholders in Motorola as share value rose by more than 50% overnight. But why has Google decided to add what is ultimately a hardware company to its portfolio?

The answer is, as one would expect, to do with Google’s Android mobile operating system. By controlling all aspects (software, hardware and content) of their devices Apple has been able to dominate certain areas of the technology market. Through the purchase of Motorola Mobility Google will look to mimic this success as they can produce hardware specifically for their existing Android software.

However there is deeper reasoning behind the deal in that the sale will include thousands of valuable patents. These patents will strengthen Google’s legal repertoire in any future lawsuits involving industry rivals. Patents are the ultimate intellectual property currency. They can be used in a number of ways, as both offensive and defensive weapons in legal disputes. Coming out on top in legal disputes can be the difference between success and failure. Apple’s successful injunction preventing the sale of Samsung’s Galaxy tablet in the EU has to be costing the latter millions of dollars. Dollars which are most likely finding their way to Apple in the form of iPad sales. More patents = better defence from such action being taken and increases the likelihood of success when taking action against a competitor.

There is little doubt that following the completion of the deal Motorola hardware will become the flag bearer of Android technology. Only time will tell if this approach will prove successful for Google as it could alienate other hardware firms which use Android software, pushing them towards alternative software developers. On the other hand it could increase the prowess of Android and protect Android from future complications and legal issues.

As stated above; only time will tell where the deal will take Motorola, Android and Google. Hopefully the outcome will be some excellent new technology, not a few lawsuits preventing other technology from getting to market.