By Gautham Nagesh - 08/15/11 02:51 PM EDT
Google announced plans Friday to buy mobile phone maker Motorola Mobility for $12.5 billion in a major deal that seeks to boost Google's Android smartphone platform.
The acquisition would be the largest ever for Google and is likely to draw scrutiny from members of Congress and federal antitrust regulators.
Google is already under the microscope for other recent acquisitions, such as that of travel search firm ITA Software, due to the Internet giant's control of two-thirds of the search market.
Google CEO Larry Page on Monday said Motorola would be run as an independent business, and stressed there was a natural fit between the two companies.
The move gives Google a foothold in the market for wireless handsets along with access to Motorola's huge trove of patents, which the search giant plans to use to "protect" Android. Google recently accused Apple, Microsoft and other firms of buying up old patents to combat Android's growing market share.
The announcement boosted Motorola's stock as well as that of Research in Motion, the maker of the BlackBerry, which has struggled in competition from Apple's iPhone and Google's Android.
Android is now the leading smartphone platform among both current and new smartphone users, but until now the firm has largely avoided entering the hardware business. The move will put Google in direct competition with rival Apple, which manufactures the iPhone itself.
Page said Google plans to run Motorola independently as a licensee of Android without providing any special advantages compared to other Android phone manufacturers such as HTC and Samsung.
"This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business," Page said. "Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences."
The deal comes amid a broad antitrust probe by the Federal Trade Commission into Google's search practices. The FTC is trying to determine whether the firm unfairly boosts its own services in search results, as competitors have alleged. Google argues its search is aimed at giving users the best possible results.
The FTC is also reportedly examining whether Google has pressured wireless phone makers that it partners with on Android to block other smartphone operating systems. The Motorola Mobility deal reportedly contains a $2.5 billion reverse termination fee that Google would have to pay Motorola if the deal is blocked by the government or fails to be completed for any reason.
This story was posted at 9:30 a.m. and updated at 10:51 a.m.