Big deal: Google buys Motorola

Google, generally described in news articles as a search engine giant, will become a cell phone manufacturer following news that it will purchase cell phone makers Motorola for $12.5 billion.

From the San Jose Mercury News:

The deal, by far the largest in Google’s history, has  been approved by the boards of both companies. It  will give the Mountain View company its own  hardware products and allow it to compete more  closely with phone- and tablet-makers such as   Apple (AAPL), Research In Motion, Hewlett-Packard ( HPQ) and the new alliance between Microsoft and Nokia.

The acquisition also gives Google access to more  than 17,000 patents held by Motorola, which  pioneered the cellphone business. Analysts said  that could help Google stave off a barrage of patent  claims levied by Apple, Microsoft and other rivals  battling the company’s Android operating system.  The deal could also boost Google’s faltering efforts  to bring the Internet to living room television sets, by  allowing Google to leverage Motorola’s expertise in  set-top TV boxes.

Fundamentally, the decision to buy Motorola  underscores the growing importance of mobile  computing to Google, which draws most of its  revenue from selling advertising associated with  Internet searches, as consumers and workers  increasingly perform more computing tasks with  handheld devices. Google’s lead in mobile search is  thought to be even greater than its search  dominance on desktop computers.

“It’s no secret that Web usage is increasingly  shifting to mobile devices, a trend I expect to continue,” Google CEO Larry Page said in a conference call Monday morning.