After waiting months for the go-ahead to say so, Google CEO Larry Page today announced that his company now officially owns Motorola Mobility.
Google announced plans to acquire Motorola Mobility for $12.5 billion in August. Upon doing so, the companies had to clear regulatory hurdles to get the deal done. Regulators in both the U.S. and the European Union approved the acquisition back in February, but the companies were forced to wait for China. Over the weekend, China approved the deal, paving the way for Google to close it.
As part of the acquisition, Page announced today that Motorola Mobility chief Sanjay Jha has stepped down from his post. In his place, Google has named "long-time Googler" Dennis Woodside to be the mobile firm's new chief executive.
"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," Page wrote in the blog post. "One of his first jobs at Google was to put on his backpack and build our businesses across the Middle East, Africa, Eastern Europe and Russia. More 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."
It has been widely believed that the main reason Google acquired Motorola Mobility was for its patents. The search company and its vendor partners are currently waging legal battles around the world with a host of companies over claims that Android violates patents. Motorola Mobility holds thousands of patents and patent applications that could come in handy for any future legal proceedings.
For Motorola Mobility, the deal made perfect financial sense. The company is not the leading Android vendor, and has faced some trouble competing against Apple. When Google came along with a $40-per-share offer, representing a 63 percent premium on its share price at the time of the deal, it just made sense.
Google has made it clear that Motorola will operate independently from its own operation, and the search giant/Android maker will not show any favoritism. However, according to reports, China was not so convinced of that, and forced Google to agree to keep Android open and free for a period of five years to ensure it didn't change its stance and give Motorola preferential treatment.
Still, Motorola's competitors haven't expressed any displeasure with the deal. In fact, J.K. Shin, Samsung's mobile head, said back in August that he was pleased with the acquisition, and believed that it "demonstrates Google's deep commitment to defending Android, its partners, and the ecosystem."
But what about Motorola employees? TechCrunch reported yesterday, citing sources, that Google is planning to launch a "listening tour" at Motorola to see what the mobile company's employees actually do. Based on that information, the company could decide to lay off some Motorola employees. Although TechCrunch didn't say how many employees might be terminated, its sources said that the layoffs could come down "imminently."
Google declined CNET's request for comment on the matter, and Page made no indication in his blog post whether layoffs would be coming. Instead, he touted Motorola's success over the last several decades.
"Motorola is a great American tech company that has driven the mobile revolution, with a track record of over 80 years of innovation, including the creation of the first cell phone," Page wrote. "We all remember Motorola's StarTAC, which at the time seemed tiny and showed the real potential of these devices."
(courtesy:cnet.com)
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