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Google Cites Patents For Motorola Buy, Vows Android To Remain Open

8/15/2011 08:29:02 AM Eastern

UPDATED! Mountain
View, Calif.  - Google's purchase of Android
licensee Motorola Mobility and its thousands of cellular and set-top box
patents will build Google's patent portfolio and protect the Android ecosystem
from competitors' ill-founded patent claims, company executives said.

During a
conference call with press and analysts, Google CEO Larry Page said other
Google executives vowed that Google will remain an open-source OS, that the
purchase is pro-competitive because it will protect and extend the Android ecosystem,
and that Motorola will operate as a separate business with segmented financial
reporting.

The acquisition
"will benefit all partners," Page claimed. The acquisition won't produce any
change "in how we're running Android," he contended, referring to other handset
and tablet makers that offer Android smartphones and tablets. Nonetheless, he
said he would "work closely with the Motorola team" to boost Motorola's
business and the Android ecosystem.

Motorola has
exclusively allied itself with Android for its smartphone business and has
reversed its staggering losses of a few years ago after substantial downsizing
and adopting a smartphone focus but is still falling short of profitability.
Its patent portfolio consists of more than 17,000 wireless patents and more
than 7,500 pending patents in wireless standards as well as in "nonessential
patents" that help its deliver competitive products, said Motorola chairman/CEO
Sanjay Jha.

For his part,
Google mobile senior VP Andy Rubin said he spoke with the top five Android
licensees yesterday and "all showed very enthusiastic support."

The acquisition
will not only create "tremendous shareholder value" but will "accelerate
innovation" not only in mobile products but also in cellular but also in
Motorola's home business, which develops set-top box and infrastructure for
cable companies, Page said.

Speaking from
Google's offices here, Motorola chairman/CEO Sanjay Jha said Google's backing
will "provide much better support to the business at Motorola Mobility [and to]
the Android ecosystem." Motorola will now be able to take its products "to the
next level," including products in its home business in which it is in a
"unique position" to leverage the convergence of mobile and home devices, he
said.

Page added,
"Motorola Mobility has a tremendous opportunity for growth." He said Google
"really believes in the plans" of Motorola.

Despite Motorola's
patent portfolio, Microsoft has nonetheless sued Motorola and Barnes &
Noble over mobile patents and has sued and settled with HTC and handheld-device
maker Itronix over alleged Android infringement of Microsoft patents, analysts
said.

A timetable to
close the acquisition wasn't announced, but Google said the transaction will require
regulatory approval in the U.S., Europe and possibly other jurisdictions, said
David Drummonds, Google senior VP of corporate development and chief legal
officer.

Under the deal, Google
will acquire Motorola Mobility for $40 per share in cash, or about $12.5
billion. The transaction was unanimously approved by the boards of directors of
both companies.

"The acquisition
of Motorola Mobility, a dedicated Android partner, will enable Google to
supercharge the Android ecosystem and will enhance competition in mobile
computing. Motorola Mobility will remain a licensee of Android and Android will
remain open," the companies said in a prepared statement.

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

Motorola's Jha
said in the statement that the deal "offers significant value for Motorola
Mobility's stockholders and provides compelling new opportunities for our
employees, customers, and partners around the world." Through the deal, he
added, "We will be able to do even more to innovate and deliver outstanding
mobility solutions across our mobile devices and home businesses."

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