NEW YORK (Dow Jones)--Google Inc. (GOOG) agreed to acquire Motorola Mobility Holdings Inc. (MMI) for about $12.5 billion, a deal that spells the end of independence for a venerable American company and reshapes the booming market for smartphones as computing shifts from the desktop to mobile devices.
The deal gives Google--which has spurred widespread adoption of its Android mobile operating system by licensing it freely to mobile phone makers--its own in-house hardware operation, potentially enabling it to challenge rival Apple Inc.
Motorola Mobility's total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.
The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.
Two laggard mobile-phone companies, Research in Motion Ltd. (RIMM, $25.61, +$1.05, +4.28%) and Nokia Corp. (NOK, $6.02, +$0.66, +12.31%), may want to send a nice thank you card to Google. Google's deal raises hopes Research in Motion and Nokia might also be takeover targets now that there's a shrinking pool of independent companies that make smartphones. Still, a word of caution: an acquisition of Research in Motion by a foreign company -- Canada doesn't have a big enough player to acquire RIM --could face difficulty gaining Canadian government approval. Similarly, the likelihood of a Nokia deal seems slim given its $20 billion market value as of Friday's close.
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