Google’s $12.5 billion deal to buy Motorola Mobility has been concluded with the Chinese authorities giving their approval last week for the deal, though under one condition – that Google give away its latest version of Android free of charge for the next 5 years. This decision was made after concerns of hurting competition in China came up if Google provides its software free of charge to Motorola and withholds the same from other makers. The deal, which was approved on Saturday, was made in August last year and is expected to close this week.
Around 250 million devices work on Android and Google distributes it for free. Even if it chose not to, device makers would still be able rely on Microsoft, HP and RIM to name a few to power their devices. It was declared by the US Justice Department earlier that Google’s acquisition of Motorola Mobility did not hurt competition in a market that was becoming increasingly competitive and was seeing a steep rise in the number of people turning to tablets and mobile devices to go online. This left countries Israel,Taiwan, and China to consider the deal.
The deal had been not been approved in China earlier due to a disagreement over computer security and censorship with Google accusing the Chinese government of hacking into its system. This led to strained relations between the government and Google and the company eventually moved out of the country by shifting its servers to Hong Kong.
Motorola is Google’s biggest acquisition, the price of which is more than the sum of all of its other acquisitions, and will allow Google to expand into tablets, computers and other hand held devices. It will give Google access to 17,000 of Motorola’s patents which is a big step for Google in the competition with Apple, Microsoft and other companies in the mobile arena.
The Motorola acquisition will pose a challenge to Google’s management team who have so far only dealt with Internet search and ads. The company will now have to deal with the mobile hardware business. Google’s Android manufacturers have not made a secret of their concerns that the company will favor Motorola with faster access to latest versions of Android, though these concerns have been partly belied by Google’s move to set up its own store to sell Nexus devices from five manufacturers.