Google-Motorola Mobility Deal Finalized

Nine months after it was announced, the Google-Motorola Mobility deal is now complete.

Google (Nasdaq: GOOG) has acquired the Android smartphone and tablet maker for $12.5 billion. Consider yourself warned, Apple (Nasdaq: AAPL).

The Google-Motorola Mobility deal gives the search-engine giant a foothold in the extremely lucrative mobile device market that Apple currently dominates. Motorola offers a wide array of technology patents – 17,000 of them, all told – and products that include smartphones, tablets, Bluetooth accessories and DVRs.

Google will benefit from all of them. Analysts have speculated that the company will use Motorola’s smartphones and tablets as a platform for its Google TV and Android software. That could help Google pose a challenge to Apple, whose iPhone 4S is the top-selling smartphone in the U.S. In fact, iPhones occupied the top three spots among the best-selling smartphones in America last year.

Androids, however, are the top operating systems in the U.S. smartphone market, with a 47% market share. Apple’s iOS platform is a distant second, with a 30% market share. So Google’s Motorola Mobility purchase gives the company additional access to the maker of the top smartphone operating system in the U.S. – something that could help it make a dent in Apple’s commanding lead in the smartphone arena.

The Google-Motorola Mobility deal took three-quarters of a year to complete because it was awaiting approval from Chinese regulators. One big stipulation of the deal, however, is that Google had to promise to keep its Android mobile phone software open and free for at least five years.  

Despite the good news, Google shares have fallen 1.9% in mid-day trading. At $602.38 per share, however, the stock is higher than it was to start the week.

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