Google Buys Motorola For $12.5 B: Top 10 Reasons Why

  on August 17 2011 9:00 AM
  • Motorola Logo
    Now the mobile-device company is left with nine directors. Reuters
  • A Google homepage is displayed on a Motorola Droid phone in Washington August 15, 2011
    A Google homepage is displayed on a Motorola Droid phone in Washington August 15, 2011 Reuters
  • Motorola's Droid X smartphone, which will be available through Verizon Wireless, is displayed during a news conference announcing its release in New York June 23, 2010
    Motorola's Droid X smartphone, which will be available through Verizon Wireless, is displayed during a news conference announcing its release in New York June 23, 2010 Reuters
  • The Motorola PHOTON 4G Summer (L) and the Motorola TRIUMPH Virgin Mobile Summer mobile phones are seen during their launch in New York June 9, 2011
    The Motorola PHOTON 4G Summer (L) and the Motorola TRIUMPH Virgin Mobile Summer mobile phones are seen during their launch in New York June 9, 2011 Reuters
  • The home screen is shown on Google's latest Android operating system, Honeycomb, on a Motorola Xoom tablet device following a news conference at Google Headquarters in Mountain View, California February 2, 2011
    The home screen is shown on Google's latest Android operating system, Honeycomb, on a Motorola Xoom tablet device following a news conference at Google Headquarters in Mountain View, California February 2, 2011 Reuters
  • Motorola Atrix
    Motorola Atrix Reuters
  • A man uses his Motorola mobile phone
    A man uses his Motorola mobile phone Reuters
  • Report: Apple Triggers Initial Production of iPad 3
    It’s one less competitor for the lucrative tablet market as Hewlett-Packard revealed last week its intent to shift its core operation from hardware business to a premium information technology service provider yet current market leader Apple is not taking any chances. Reuters
  • Samsung Galaxy S smartphone
    Models pose with the new Samsung Galaxy S Android smartphone during its launch ceremony at the headquarters of Samsung Electronics in Seoul June 8, 2010 Reuters
  • Google CEO Larry Page
    Google co-founder Larry Page speaks during a news conference introducing the company's new web browser, dubbed Google Chrome, at the company's headquarters in Mountain View, California September 2, 2008. Reuters
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Internet search engine giant Google Inc.'s $12.5 billion acquisition of Motorola Mobility has shocked market watchers because the handset maker is struggling to keep pace with bigger Android rivals like Samsung and HTC -- but the deal could actually turn out to be Google's best move ever.

Google on Monday dipped into its $39 billion cash reserve to buy Motorola Mobility -- lock, stock and barrel -- for $12.5 billion, or at 63 percent premium over the target stock's Friday closing price.

The acquisition, Google's largest ever (the previous largest acquisition was purchase of DoubleClick for $3.1 billion in 2007), shocked the Wall Street, making Google's stock dip 2.6 percent to $549.23 soon after the announcement.

Investors were stunned because Motorola is not only the smallest of the major Android smartphone makers but it is also the only major Android handset maker whose share of the smartphone market declined in the second quarter. Motorola split into Motorola Mobility and Motorola Solutions Inc. in the first quarter of 2011.

While Motorola Mobility is responsible for making smartphones and consumer products such as burglar alarms and wireless routers, Motorola Solutions is into networks business and enterprise mobility solutions.

However, Google's move could be its best ever -- and there are 10 reasons why.

Start the slideshow to see why Google is willing to pay so much for Motorola Mobility.

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