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Yesterday, Google agreed to acquire Motorola Mobility for $12.5bn. If regulators approve the deal, it will represent its largest acquisition ever.

It's a bold move by Google co-founder and now-CEO Larry Page, and one which could literally make or break Android.

Not surprisingly, the acquisition has sparked significant discussion and debate. We've rounded up some of the most interesting things observers are saying. The consensus? Google either made the best move of its life, or the worst.

Dan Lyon (Fake Steve Jobs)

Google just sandbagged its rivals. The whole thing was a rope-a-dope maneuver. Google never cared about the Nortel patents. It just wanted to drive up the price so that AppleSoft (those happy new bedmates) would overpay.

Today, with the Motorola deal, Google picks up nearly three times as many patents as AppleSoft got from Novell and Nortel. More important, Google just raised the stakes in a huge way for anyone who wants to stay in the smartphone market.

Andrew Orlowski, The Register

Google has paid $12.5bn for a negotiating chip that appears to be almost impossible to redeem. In this light, the acquisition looks like panic, rather than a calm and carefully deliberated strategy.

Google didn't take IP seriously, bidding silly numbers (such as pi billion dollars) for the Nortel patents. Then it realised it might be in trouble, and so went out and bought some IBM patents. Now it has splurged $12.5bn, truly believing the IP is going to be useful.

Larry Dignan, ZDNet

While Google’s Motorola acquisition primarily revolves around wireless devices, there’s a significant living room play here. Why? Motorola Mobility has a significant set-top box business. In the cable box world, there are two players: Cisco and Motorola Mobility, which is the leader.

Google will get significant relationships with cable providers and give Android more of a foothold.

Tim Bradshaw, Financial Times

Google’s press package for its $12.5bn acquisition of Motorola Mobility included a surprising accompaniment: a list of supportive quotes from HTC, Samsung, Sony Ericsson and LG.

These four smartphone makers have ridden Android’s wave of growth in the last two years but may feel they have been dumped on the beach by Google’s acquisition Motorola, a substantial competitor with 11 per cent of the US smartphone market.

The fact that all four statements are so similar only adds to the sense that they have been written through gritted teeth.

Douglas McDonald, Head of Mobile, Tullo Marshall Warren

Apple's ability to develop both hardware and software units, gives it a distinct advantage over its competitors and has made it extremely profitable. This acquisition may provide the same for advantages for Google/Android, as it will offer hardware alongside its software for the first time.

The fallout may be that, assuming Nokia stays independent, some handset manufacturers that presently focus on Android may be drawn to Windows Phone 7. Microsoft will be the only viable option for those handset providers that want to use an independent source to obtain their software. 40% of the smartphone market uses Android. This may all change as Google becomes a competitor in the handset market.

Florian Mueller, FOSS Patents

It would be a mistake to look at this as just (or primarily) a patent deal. We're looking at a deal that would fundamentally change Google's Android-related business model. Google assures that Android will continue to be available on open source terms, but Android's openness has previously been doubted, including by a partly EU-funded study.

The likes of Samsung, HTC and LG obviously don't have any other choice than to say at this point that they welcome the deal. They will continue to say that for some time. They obviously weren't going to bash the deal in public. But there's no way that they can compete with a Google-owned Motorola Mobility on a level playing field.

Google said in the conference call that it would operate Motorola Mobility as a separate business, but the price Google agreed to pay is not reflective of the value of Motorola Mobility as a stand-alone business: that's the kind of price paid by a strategic buyer who plans to use the acquisition target as leverage for its (Google's) own core business.

Andrew Girdwood, Media Innovations Director, bigmouthmedia

Could this be about the devices? Perhaps. I'm an Android fan and one of the frustrations I have with vendors is that they insist on putting their own touch to the software on the phones. It doesn't create an attractive USP for them.

It just slows down, sometimes stops, the rollout of OS upgrades. I wonder whether this determination to skin Android software that has been one of the biggest challenges in the development of Android Tablets.

Patricio Robles

Published 16 August, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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