Google closes on Motorola Mobility acquisition

Google Inc. on Tuesday completed its $12.5 billion acquisition of phone maker Motorola Mobility Holdings Inc. and said it has appointed a Google executive as the new CEO of the business

Dennis Woodside, previously president of Google’s Americas region, is Motorola’s new CEO. Departing CEO Sanjay Jha will help to ensure a smooth transition, Google said.

It is Google’s largest acquisition ever, and pushes it deeper into cellphones. Google is already a formidable force in mobile computing thanks to its Android software, the chief challenger to Apple Inc. and its iPhones.

At the same time, the acquisition is largely a defensive one. Google needs Motorola’s trove of 17,000 cellphone patents to defend Android phones against lawsuits by Apple, which accuses them of copying iPhone features.

Google and Motorola announced the deal last summer, expecting it would close late last year or early this year.

But approval from Chinese regulators was slow in coming. On Saturday, China approved the deal, on condition that Google Inc.’s Android software would remain free for other phone makers for at least five years. Regulators in the U.S. and Europe had cleared the deal three months ago.

The acquisition will also test Google’s ability to keep its business partners, shareholders and employees happy as it moves beyond Internet search and other services built on software to begin manufacturing a wide range of equipment for the first time.

Google has been reassuring its Android partners that Motorola’s devices won’t get souped-up versions of the software or receive other preferential treatment.

Although it initially was drawn to Motorola Mobility for its patents, Google has been signaling recently that it has been drawing up more ambitious plans for Motorola Mobility. Besides producing smartphones and tablet computers, Motorola Mobility also makes cable-TV boxes that could provide Google with a springboard for delivering more of its services, including advertising, to living rooms. However, cable companies control the market for set-top boxes, and they may not like the intrusion into their realm.

Source: USA Today

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