Google acquires Motorola Mobility for 12.5 billion dollars

Google announced Monday that it will acquire Motorola Mobility for $12.5 billion in order to “supercharge” its Android mobile operating system and build up its patent portfolio.

In a blog post championing the acquisition, Google chief Larry Page insisted the acquisition will not change Google’s commitment to keeping Android open. “We will run Motorola as a separate business,” he wrote. “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.”

Andy Rubin, senior vice president of mobile at Google, echoed those sentiments. “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community,” Rubin said in a statement.

“We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” Page wrote.

Google also said it wants to buy Motorola Mobility to defend against patent lawsuits levied by its competitors.

Motorola Mobility has been in the communications business for more than 80 years, and it invented the cell phone 30 years ago — back when it was still just called “Motorola.” Earlier this year, Motorola’s consumer products business split from its public safety business, Motorola Solutions (MSI, Fortune 500).

Motorola Mobility, the part of the business most consumers are familiar with, held on to the 17,000 patents the company has been issued worldwide. It also has 7,500 patents pending approval.

As Android has grown to become the world’s most used smartphone operating system, Google has faced an increasing number of patent lawsuits, most recently from Microsoft and Apple.

“We’ve been saying for some time that we intend to protect the Android ecosystem,” David Drummond, chief counsel for Google, said Monday on a conference call with analysts. “We think that having this kind of patent portfolio to protect the ecosystem is a good thing.”

Google recently tried to buy a portfolio of key telecommunications patents from bankrupt Nortel for $1 billion. But the winning bid — of a whopping $4.5 billion — was submitted by Google’s rivals, including Microsoft and Apple. The $12.5 billion price tag — all cash — is by far the largest that Google ever paid for an acquisition.

Google’s (GOOG, Fortune 500) stock fell about 1% in early trading while Motorola’s rose 57%.