Google may have had hand forced on Motorola

Google's buyout of Motorola is now believed to have been prompted by the threat of a Microsoft deal. New sources hinted that Microsoft had been talking to Motorola for "quite some time" and was interested in at least buying Motorola's patents, which would have likely forced Android into a perilous situation, GigaOM heard. Google had started talks five weeks earlier at the highest levels and was kept secret until late even to Google's Senior VP for mobile, Android creator Andy Rubin.

Motorola for its part allegedly resisted Microsoft. The Windows Phone developer wouldn't have been buying the company outright and had no intentions of supporting the phone business itself. Although not stated, the move would almost have invariably forced Motorola to make Windows Phones, since Microsoft would almost immediately start working towards making Android unusable through further patent lawsuits.

Other companies had been talking to Motorola about acquisitions as well, although none of these have been named. Apple likely wouldn't have been involved at all, since it wouldn't want to support Android and would almost immediately close down Motorola's hardware business.

The threat of Microsoft would explain not just Google's willing to pay 60 percent more per share than Motorola's stock value but also newly discovered conditions for the deal. Google is promising a $2.5 billion breakup fee if regulators or a souring of relations put a stop to the deal. Companies rarely put such a high value on a breakup unless they believe the risks are high or if the buyout target is worried that it might not recover if the deal fails.

Google is interested in Motorola's patents as a strategic move but, unlike Microsoft, is more concerned about defense than offense. It also plans to let Motorola run as a separate organization rather than subsuming it or dropping its hardware business.

By Electronista Staff