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Google becomes hardware company with $12.5B Motorola buy

Company pushes Android and aims for enterprise with acquisition

It's official: Google is now a hardware company.

Google said Tuesday morning that it has closed the deal to acquire Motorola Mobility for $12.5 billion.

Sanjay Jha is stepping down from his post as CEO of Motorola Mobility; Dennis Woodside, a senior vice president with Google, will take over the CEO post for the newly acquired company.

"I've known Dennis for nearly a decade, and he's been phenomenal at building teams and delivering on some of Google's biggest bets," Google CEO Larry Page said in a blog post. "Recently, he helped increase our revenue in the U.S. from $10.8 billion to $17.5 billion in under three years as President of the Americas region."

As recently as March, the deal was slowed to a crawl when the Chinese government expanded its investigation of the purchase. China finally cleared the deal this past weekend.

Google had received approval for the deal from both the U.S. Department of Justice and the European Commission in February. The purchase also was approved by officials in Israel and Taiwan, leaving China as the last holdout.

The purchase will help Google defend itself against various patent infringement lawsuits over the Android operating system, since Motorola has one of the smartphone industry's largest patent libraries.

Page also hailed the purchase as something that will allow Google to gain a bigger foothold in the mobile market.

"It's a well-known fact that people tend to overestimate the impact technology will have in the short term, but underestimate its significance in the longer term," he wrote. "Many users coming online today may never use a desktop machine, and the impact of that transition will be profound, as will the ability to just tap and pay with your phone. That's why it's a great time to be in the mobile business."

Industry analysts also think the acquisition could help Google push into the corporate enterprise.

A Google phone running Android could be very marketable not only to consumers but to IT departments that need to outfit workers with mobile devices. Basically, owning both the handset hardware and the operating system could be a powerful combination that could drive Android adoption.

Google has been working to expand its business into other hardware ventures. With Motorola, Google may be better able to push its way into the home entertainment market with its Google TV platform. In addition to being a world-renowned smartphone maker, Motorola also is a major player in the home set-top box sector.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is [email protected].

See more by Sharon Gaudin on Computerworld.com.

Read more about mobile and wireless in Computerworld's Mobile and Wireless Topic Center.

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