Google today announced in a blog post an agreement to acquire Motorola Mobility for $12.5 billion, a 63 percent premium to the closing price of Motorola Mobility shares on Friday, August 12, 2011. Is this an example of “moon shots” we’d been promised? Hard to tell as this is a developing story, but Google recently accused Apple and others of attempting to “strangle Android” through litigation.

Motorola Stock was suspiciously up last Friday on rumors of an Icahn takeover.  Perhaps Icahn was gathering enough strength to make the decision.

A statement on Google’s Investor Relations site and Motorola Mobility’s press section quotes Motorola CEO Sanjay Jha, Google CEO Larry Page and the search firm’s senior vice president of mobile Andy Rubin as saying that this strategic acquisition will “enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing.” It will be interesting to see how other Android backers react to the news that their operating system provider is in bed with one of their rivals. Google on its part says Motorola Mobility will “remain a licensee of Android and Android will remain open”, adding they will run Motorola Mobility as a separate business.

If the deal doesn’t go through, Google owes Motorola $2.5B.

Motorola Mobility, of course, has helped put Android on the map with their aggressive anti-Apple promotion of the original Droid. Still, Apple is reaping the vast chunk of profits in the handset business. Motorola Mobility in the June quarter reported a GAAP net loss of $56 million, 19 cents a share, on revenues of $3.3 billion and non-GAAP earnings at nine cents a share. They shipped 400,000 Xoom tablets, amounting to an estimated 2.65 percent tablet market share in June, and 4.4 million Android smartphones, enough to earn an eight percent market share and rank Motorola Mobility as the #8 smartphone vendor and #5 Android backer. Contrast this to Apple…

Apple in the June quarter sold an astounding 20.34 million iPhones and 9.25 million iPads, in addition to four million Macs and nine million iPods, enough for all-time record quarterly revenue and earnings of $28.57 billion and $7.31 billion respectively. iPhone alone has captured two-thirds of the profits generated from sales of handsets in the second quarter of this year, analyst Horace Dediu explained. In addition, latest surveys from the biggest name in market research have all cemented Apple as the new king of smartphones. Conventional wisdom has it that Google may be after Motorola Mobility’s patent portfolio here, although it seems preposterous that the search giant would pay a lump sum of $12.billion for an intellectual property portfolio that is strong, but probably not strong enough to defend the patent bomb that is Android.

Patent expert Florian Mueller said on Twitter he “would caution everyone against overestimating the strength of Motorola Mobility’s patent portfolio,” noting that “Apple and Microsoft sued Motorola Mobility anyway”. Mueller also observed this morning in a blog post that most Android vendors have lost their Linux distribution rights, opening doors to thousands of people out there “who could legally shake down Android device makers, threatening to obtain Apple-style injunctions unless their demands for a new license grant are met”. Mueller also told me on Twitter that “Google may want to become an Apple” by entering the hardware side of the mobile business. Steve Jobs several times quoted the legendary tech visionary Alan Kay who had said many years ago that “people who are really serious about software should make their own hardware”.

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