World’s Biggest Tech Acquisition: Google-Motorola $12.5 Billion

When Oracle acquired Sun microsoystems back in 2009, situation was similar. Oracle bought Sun microsystems that cashed out to $9 billion, was world’s biggest tech acquisition of that time. But Google, with bigger cash, beats them to take the top place at the Biggest Tech acquisitions of all times.

Patents with Benefits

Google is spending $12.5 billion to buy Motorola Mobility. But the big prize isn’t Motorola’s lineup of cellphones, computer tablets and cable set-top boxes, It’s Motorola’s more than 17,000 patents — a crucial weapon in an intellectual arms race with Apple, Microsoft and Oracle to gain more control over the increasingly lucrative market for smartphones, tablets and other mobile devices.

Google has $39 billion in cash and can easily afford it, the price translates to $40 per share, 63 percent above Motorola’s stock price before the deal was announced.

However, it might be a good short term strategy, long term impacts are yet to be seen.

Should Android OHA worry?

Android partners including HTC, Samsung, SonyEricsson have showed a strong support to Google’s move, at least publicly. Its hard to say it now if they are actually worrying of being a competitor to Google. All partners have heavily invested in android platform, and there is no looking back for them, if Google builds an apple like strong hardware-software tight-coupling, Open handset alliance is going to shatter. But won’t let that happen, they would do anything to keep Android green.

Its going to be hard

And by getting Motorola employees onboard, Google now has 48,000 employees 60% up from 29,000 that it had previously. It would not just be the biggest ut also the largest employee-on-employee acquision in Tech sector, ever.

Early on, investors hate it. Google stock has gotten smacked in the pre-market. It would be harder for Google to convince almost all its investors.

Other Benefits

Buying Motorola also would push Google into phone and computer tablet manufacturing, competing with other device makers who rely on Android. The largest makers of Android devices are all supporting a deal that Google CEO Larry Page said was too tempting to resist.

“With mobility increasingly taking center stage in the computing revolution, the combination with Motorola is an extremely important step in Google’s continuing evolution,” Page told analysts in a conference call Monday.

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