Breaking News: Google will buy Motorola Mobility for $12.5 Billion

In an announcement that shocked the mobile phone industry, Google has announced today that they will buy Motorola Mobility for $12.5 Billion dollars - 63% higher than Motorola's shares' value at the Market close Friday - making this the search giant's largest acquisition to date.

The move to buy Motorola Mobility - the mobile device division of the company that pioneered the mobile phone market some 30 years ago - has many strategic advantages for Google, but may also anger Google's other handset manufacturing partners.

Motorola has been a household name in communications for more than 80 years, and included in the purchase, are more than 17,000 patents that Motorola holds, and another 7,500 patents that are pending approval.

Android has grown to become the world's most used mobile phone platform, and as a result, Google has faced an increasing number of lawsuits - mostly from Apple and Microsoft. Google also recently tried to buy Nortel's portfolio of telecommunications patents, but was outbid by a $4.5 Billion bid placed by a consortium of Google rivals - including Microsoft and Apple.

Google CEO Larry Page said in a statement that Google will continue to operate Motorola Mobility as a separate company, and Motorola will continue to lease Android from Google.

-------------------

UPDATE: Google and Motorola have signed prenuptuals - If Google backs out of the sale, they have agreed to pay Motorola the sum of $2.5 Billion, and if it is Motorola who gets cold feet, they will pay Google a sum of $375 Million according to this Business Week article.