Telecom Lead Asia: After winning approvals from the
European and U.S. regulators for its planned $12.5 billion purchase of mobile
handset maker Motorola Mobility, Google has got regulatory nod from
the authorities in China that clears the way for the $12.5 billion deal to close
early next week.
However, Chinese regulators attached a big condition that
Google’s Android operating system for mobile devices
remains available to all at no cost for the next five years.
The latest versions must be made available free of charge
for the next five years, apparently in response to concerns that competition
could be hurt if Google gives updated versions to Motorola Mobility and
withholds them from others. Google doesn’t currently charge for Android.
The acquisition will allow Google to expand into
manufacturing phones, tablet computers and other consumer devices for the first
time.
Google, whose Android software is the top operating system
for Internet-enabled smart phones, announced in August last year that it would
buy phone-maker Motorola for its 17,000 patents and 7,500 patent applications,
as it looks to compete with rivals such as Apple and defend itself and Android
phone manufacturers in patent litigation.
TelecomLead deal of 2011 : Google to buy Motorola for $12.5
billion
The $12.5 billion price paid by Google is more than the
combined amount that Google has paid for the 185 other acquisitions that it has
completed since going public in 2004.
After failing its bid in the Nortel auction, Google increased
its bid for Motorola by 33 percent before settling on the $12.5 billion
figure. That demonstrates the eagerness of Google to acquire the arsenal of
Motorola’s current 17,000 and 7,500 pending patents.
Motorola Mobility’s expertise in mobile devices and
set-top boxes for cable TV will allow Google to play an even more influential
role in shaping the future of hand-held computing and home entertainment.
Earlier, the U.S. Justice Department found no evidence
that Google’s ownership of Motorola Mobility would lessen competition in a
mobile device market that is becoming increasingly important as more people
connect to the Internet on smartphones and tablet computers instead of desktop
and laptop computers.
The union with Motorola Mobility will open new
opportunities and pose potentially troublesome challenges for a management team
that so far has concentrated on Internet search, ad sales and other
software-driven online services.
