Google Buys Motorola Mobility for 12.5 Billion to “Supercharge” Android

Google is officially a phone and tablet maker. Google CEO Larry Page  has announced the company’s plans to acquire Motorola’s Mobility business for 12.5 billion. This purchase includes Motorola’s cellular handset division plus its line of digital set-top boxes for home entertainment. This is a bold move that not only serves to protect Google and is partners on the patent front, it signals that Google will compete more directly with Apple in the smartphone hardware war.

Software companies partnering or outright buying hardware makers seems to be the trend these days in light of Microsoft’s pledge to work closely with Nokia to create exciting new handsets. But how well will a Google buyout of Motorola work and will Motorola retain much of its independence?

Andy Rubin, Senior Vice President of Mobility at Google said in a press release that, ““We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community.”

Motorola is known for its popular Droid line of smartphones but has been criticized for lackluster software, namely the Motoblur interface. Google will likely offer hands-on guidance and perhaps integrate the latest Android software into Motorola devices first.

In a press release Google also emphasized that its Motorola acquisition will enable to “better protect Android from anti-competitive threats from Microsoft, Apple and other companies.” So consider this deal a way to shore up Android’s patent defenses.

This deal also signals a renewed push into the living room. Motorola’s set-top boxes reach millions of customers through cable TV providers, so it makes sense that Google will try to make Google TV a bigger platform for home entertainment by going directly to subscribers.

What remains to be seen is how other Android partners will react to the acquisition–beyond canned quotes like the ones Google prepared in advance of today’s news. Will this deal force HTC and Samsung to embrace Windows Phone more or to consider licensing webOS?

For Google this is the comapny’s chance to show what it can do when it owns both the hardware and software parts of the equation, just like Apple. CEO Larry Page says Google will run Motorola as a separate business, but there’s no question that more will be expected of Motorola’s phones and tablets now that the company that makes Android is behind the scenes.

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