Google’s acquisition of Motorola Mobility is not one to be ignored! The $12.5 billion deal will see Motorola’s mobile business remain as a separate entity, with Google hoping to “supercharge the Android ecosystem,” in the words of Larry Page.
Sanjay Jha, CEO of Motorola Mobility and the man behind the deal, is a former Qualcomm COO who moved to Motorola three years ago. As David Manners recorded, the Motorola losses in its handset division at the time – which it wanted to sell – were the best part of a billion a quarter: $840 million of losses in Q308…
That represents a huge, unsuccessful turnaround for Jha, and Google will also be happy to acquire a presumably useful patent pool. As Engadget writes:
This comes hot on the heels of a $56 million Q2 net loss for Moto – and CEO Sanjay Jha’s less than subtle hints about going fishing for Android-related patent royalties. Now, at a price of $40 per share for a total of about $12.5 billion, Big G will be making Moto a “dedicated Android partner” to “supercharge the Android ecosystem” and “enhance competition in mobile computing.”
How this will leave Google’s other Android customers feeling – Samsung, HTC, et al – is less clear… Will this make Android a less attractive proposition, favouring one of their competitors?
In the official announcement, Google writes:
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.
‘Motorola Mobility’s total commitment to Android has created a natural fit for our two companies,’ said Larry Page, CEO of Google. ‘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.’
‘This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world,’ said Sanjay Jha, CEO of Motorola Mobility. ‘We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.’
In the most recent Motorola Mobility financial statement (Q211), where it recorded a GAAP operating loss of $85 million, Jha said:
“In the second quarter, Mobile Devices launched several new smartphones in the U.S. and markets around the world. Revenues grew over 40 percent driven largely by Latin America and China where sales more than doubled year over year. Our Home business delivered another strong performance, and we introduced several innovative products and services for next generation multi-screen video solutions. With a focus on profitable growth and delivering differentiated LTE smartphones and tablets, we expect to achieve profitability in Mobile Devices in the fourth quarter and for the full year 2011.”