Google is set to acquire Motorola Mobility for $12.5 billion ... in cash (Google has about $39.5 billion in cash to draw from). This acquisition — the search giant's largest to date — means that Google will be able to "supercharge the Android ecosystem," Google CEO Larry Page said in a statement. It also puts the company in direct competition with Apple.
Part of Google's strategy is to strengthen its patent portfolio, thereby protecting it from attacks by competitors.
What does this mean for other companies that use the Android operating system to power their smartphones? Google claims it will keep the system an open platform and that Motorola will be run as a separate company, and several other partners have released statements in support of the announcement.
Motorola — which has a strong presence in Austin — has approximately 19,000 employees worldwide. Google only has around 28,000 employees in its entire company. It's unclear how the acquisition will impact Motorola's current employees. When Google bought DoubleClick in 2007, it kept only 60 percent of the company's employees however.
The Motorola deal is expected to close in late 2011 or early 2012.