Google has tried its hand at making first party smartphones in the past with mixed results. The problem was in part that Google was more a software company than a hardware firm meaning that it had to farm the design and making of the phones out to other firms. The days of Google not having the smartphone design prowess it needs and wants are over with Google announcing that it has agreed to purchase Motorola Mobility.
Motorola is one of the biggest names in the Android realm when it comes to handsets. The deal is a whopper too. Google is buying Motorola Mobility for $40 per share working out to $12.5 billion. That is a premium of 63% over the closing price of the stock on Friday. The deal already has the approval of the boards from both companies. Motorola Mobility will be run as a separate business.
Google notes that the purchase of Motorola Mobility will not change its commitment to run Android as an open platform. The transaction is subject to the normal closing conditions that go with massive purchases like this. The deal has to get regulatory approval in the US, EU, and in other countries. The deal also needs the approval of Motorola Mobility stockholders. Google hopes to finish the deal by the end of 2011 or early in 2012.