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Exclusive: Guess who else wanted to buy Motorola?

Google may not have had much of a choice when it came to buying Motorola Mobility for $12.5 billion. If it didn’t, someone else would have and that would have put the company in an even bigger patent hole.

Our sources say that Motorola was in acquisition talks with several parties, including Microsoft (s MSFT) for quite some time. Microsoft was interested in acquiring Motorola’s patent portfolio that would have allowed it to torpedo Android even further. The possibility of that deal brought Google (s GOOG) to the negotiation table, resulting in the blockbuster sale.

Motorola found a Google deal more digestible because Microsoft had no interest in running a hardware business and was essentially interested in Motorola’s vast collection of patents. Google moved aggressively, and at $40 a share, Google is now paying a 60 percent premium to Motorola’s recent stock price. The deal it struck gives it access to Motorola’s strong portfolio of 17,000 current patents and 7,500 patent applications across wireless standards and non-essential patents on wireless service delivery.

The high-level talks between Google and Motorola started about five weeks ago. Google CEO Larry Page and Motorola CEO Sanjay Jha were talking directly, and only a handful of executives were brought into discussions. Our sources suggest that Android co-founder Andy Rubin was brought into the talks only very recently.

My view is that while Google might have won the battle, in the long run it has put the Android ecosystem at risk. Mobile industry insiders view this as a ray of hope for Windows Mobile Phone 7 to sign-up the disillusioned handset makers who at this point must be reworking their mobile OS strategies.

104 Responses to “Exclusive: Guess who else wanted to buy Motorola?”

  1. Kevin Lynch

    Google in their press release state quite clearly that Motorola Mobility will be run as a separate company and Android will continue to be developed as it is now. Meaning it will remain an open platform available to all handset makers.

    If anything I think the likes of HTC and Samsung will be quite happy about this deal. It means Google have taken a huge step towards being able to help them fend off malicious patent attacks from Microsoft, Apple and Oracle. So I just can’t see how the author comes to the conclusion this is an opportunity for Microsoft to recruit “disillusioned” hand set makers. Which hand set makers are “disillusioned” exactly?

    The OEMs currently pumping out Android handsets can’t do it fast enough. Every other month their are several new models being hyped up as the latest and greatest. Android owns the mobile market right now and it’s getting bigger all the time. Even RIM who have their own OS have incorporated Android application compatibility into their tablet.

  2. everseen

    Why is no one mentioning Motorola’s presence in people’s living rooms and a potential path for Google to take over the homes with converged software and services?

  3. This was a no-brainer for the GOOG. They now have hardware control in many markets, namely the rapidly growing mobile space. Now, they will make an exclusive version of their own phone (like the iPhone) and increase competition across the ecosystem. I’m not a Google supporter but I have great respect for their urgency with this move.

  4. Farkus McDee

    Why do people keep inferring that Android OEMs will jump on Microsoft’s bandwagon because Google owns Motorola? Microsoft now controls Nokia and Nokia will get the latest and greatest Phone 7 updates first. Remember, Nokia is laying off their own developers and going with Microsoft. Why would OEMs get involved with that?

  5. chasster123

    The realm of patent creation is growing at an alarming rate. The current method of filing exposes the “secret” at the time of filing therefore creating the business of filing a “like” patent. This is not new business but is greatly aided by the USPTO’s philosophy.

  6. The buy is for #1 patents, #2 wired broadband platforms, #3 phone/tablet. $3B, $1B, $5.5B.
    Don’t be surprised if this division goes back into the market with an IPO 12 months after close of the deal. Win for Google, win for Android and partners will be calmed. Ofcourse Patents will be retained by Google

  7. Google strength itself by buying patents and put itself in the ecosystem of apple as an manufacturer of hardware like mobile,STB and other consumer products & software .. They already have big portfolio of leading software products on internet which will Motorola devices adapt soon ..