Google launches high-stakes bid for Motorola Mobility

Google is buying cellphone maker Motorola Mobility for $12.5 billion US in a blockbuster deal that will see the search engine giant acquire Motorola's vast array of patents and turn Google into a mobile-phone maker. The deal is by far Google's biggest acquisition to date. 

It will pay $40 per share in cash, a huge 63 per cent premium to Motorola's closing price on Friday. The $12.5-billion price will consume almost a third of Google's cash hoard. Google makes the popular Android operating system that powers about 150 million cellphones around the world. 

 Motorola is one of dozens of manufacturers that makes cellphones that run on the Android platform, in direct competition with Research In Motion's BlackBerry, Apple's iPhone and Microsoft's Windows mobile operating system for smartphones. "Motorola Mobility's total commitment to Android has created a natural fit for our two companies," Google CEO Larry Page said in a statement. 

"Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers." There's no question that a driving force behind Google's purchase is Motorola's valuable cache of 17,000 patents on phone technology. 

It has more than 7,000 patent applications pending. Motorola Mobility 3-month trading chart Google recently lost out in a bidding war with a consortium led by rivals Apple, RIM and Microsoft for 6,000 patents held by bankrupt Nortel Networks.