Google's Acquistion Of Motorola Mobility

290 Words2 Pages
Google’s acquisition of Motorola Mobility Executive Summary: On August 15, 2011, Google announced that they would purchase Motorola Mobility for $12.5 Billion in Cash or at $40/share, which is a premium of 63% of the closing price of Motorola’s shares on Friday August 12, 2011. Once acquired Google will run Motorola as a separate business. Google owns the Android mobile operating system which many of Motorola phones use. Problem: Is the acquisition of Motorola Mobility good for Google? How does this affect the mobile handset market? Analysis: The acquisition of Motorola Mobility is good for Google because it turn Google into a cellphone manufacture. Google will now be in direct competition with Apple. In the mobile phone industry, there is a competition for patents. Apple and Microsoft have been purchasing thousands of patents at billions of dollars. When Google acquires Motorola, they will inherit more than 17,000 patents. These patents will help them develop their phones and compete in the demanding mobile phone market. Before the acquisition Google had very few handset and tablet patents. Acquiring these patents strengthens Google’s Intellectual property rights protection and prevents the patents from being purchased by Apple and Microsoft. The issue lies in Google’s Android operating system. Other mobile manufactures, such as HTC and Samsung, use the Android operating system. HTC and Samsung, competitors of Motorola, are concerned that Google will favor its own company, and there licensing with Google will be threatened. Although, Google has assured that Motorola Mobility will operate as its own company. Recommendation: Google should acquire Motorola Mobility because they will become a major player in the mobile phone industry. Google’s entrance will create more competition in the mobile phone

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