Google to buy Motorola Mobility for $12.5B

Google (Nasdaq: GOOG) struck a deal Monday to buy mobile phone and cable set-top manufacturer Motorola Mobility (NYSE: MMI) for $12.5 billion in cash.

The merger could see Google's Android software and search technology running on millions of cable TV set-tops, as Motorola is a top set-top supplier for most U.S. cable MSOs. Google has struggled to gain distribution for its Google TV platform through connected TVs and an over-the-top video set-top manufactured by Logitech.

"Motorola Mobility's total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers," Google CEO Larry Page said in Monday's announcement.

During a conference call about the deal Monday morning, Motorola CEO Sanjay Gupta said the agreement would allow for "real convergence" involving products from Motorola's mobile phone business and its cable set-top business.

The deal will see Google acquire more than 17,000 patents owned by Motorola Mobility. In a research note on Monday, Technology Business Research said that it viewed the acquisition as a "defensive strategy to safeguard the company's mobile assets." TBR said the deal also helps Google expand beyond its core advertising business.

For more:
- see the announcement from Google and Motorola Mobility

Related articles:
Motorola Mobility looks away from set-top, toward advanced video gateway
Breaking up is easy to do; Moto realigns into two business units
Q&A with David Grubb, CTO, Motorola's Home Business
The set-top box is dead; long live the home gateway