Google buys Motorola Mobility for $12.5B, says Android will stay open

Yowza. Google this morning announced that it will buy Motorola Mobility — Moto’s mobile device arm — for $12.5 billion.

Let that sink in for a moment. Google will now be in charge of one of the world’s major mobile manufacturers, which ultimately means we’ll see more refined Motorola Android devices in the future, and it will also strengthen Google’s patent portfolio. Google says the move will increase competition in the mobile world, but I imagine other Android partners are a bit worried this morning.

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“Motorola’s total commitment to Android in mobile devices is one of many reasons that there is a natural fit between our two companies,” Google CEO Larry Page wrote in a blog post this morning. “Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers everywhere.”

Google will acquire Motorola Mobility for $40 per share in cash, a 63 percent premium over the company’s Friday closing price. Google says it will run Motorola Mobility as a separate business. Motorola spun off its business into two divisions last year, Mobility and Solutions (the data and telecom portion), as a response to declining profits.

In its investor call this morning about the acquisition, Google stressed that it’s mostly focusing on protect Android with patents in the deal, reports All Things D. As the creator of the modern day cellphone, Motorola’s portfolio of some 25,000 patents will surely be able to help Google fend off attacks from Microsoft and Apple. Motorola Mobility also houses the company’s TV set-top box business, which could lead to some interesting Google TV integration in the future.

Google shares were down around 1.5 percent at the time of this post, while Motorola Mobility’s stock jumped 57 percent.

The company says Motorola Android phones won’t be receiving any special treatment as a consequence of the deal — but that’s a tough nut to swallow, since Google often plays favorites. Just look at the history of the flagship Nexus phones —  Google first worked closely with HTC to develop the Nexus One, and as Samsung’s dominance in the Android market grew, it became the go-to collaborator for the Nexus S. Samsung is also thought to be involved in the third Nexus phone, which is expected to launch by the end of this year. Google says Motorola will be part of the bidding process for next year’s Nexus phone, the same as always.