Here Comes Googorola!
May 21st 2012 8:08PM
Updated May 21st 2012 8:12PM
It's been more than nine long months, but at long last Googorola now has permission to land.
Google (NAS: GOOG) announced the deal back in August, shocking the mobile world with the $12.5 billion patent play. It's not as if Big G wanted Motorola Mobility's (NYS: MMI) actual business. The deal has been pending regulatory approval throughout the world, with the U.S. Department of Justice and European Union signing off in February.
The last regulatory seal of approval that was needed was China, whose Anti-Monopoly Bureau of the Ministry of Commerce cleared the transaction over the weekend. The regulators also required that the search giant keep Android free and open for at least five years, after which the Ministry of Commerce will "continue to assess the state of the Chinese smartphone operating system market."
Many local OEM players are riding Android's success, including names like ZTE and Huawei. Android's market share in the country in the fourth quarter was north of 68%, according to Beijing-based Analysys International.
Motorola has been awaiting this day, locked and loaded to seal the deal, and expects to close the transaction within two business days.
Now the real test will begin, as Google faces a dilemma over what to do with its shiny new flailing smartphone business. Will it pursue an integrated strategy like Apple (NAS: AAPL) to better compete with the iPhone, or will it continue to tap a slew or partners for ubiquity? Or both? The Wall Street Journal reported last week that Big G was looking to broaden its Nexus strategy and begin working with multiple OEM partners to create a unified front of flagship devices, even getting back into the direct-sales model that didn't work out so well with the original Nexus One.
Remember that Motorola Mobility was spun off from its parent Motorola Solutions (NYS: MSI) in January of last year, so the company was only on its own for seven short months before the acquisition was announced. Farewell, Motorola Mobility. We hardly knew ye.
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At the time this article was published Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Google and Apple. Motley Fool newsletter services have recommended buying shares of Google and Apple and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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