Google acquiring Motorola Mobility

Google Inc. said yesterday that it will pay $12.5 billion for cellphone maker Motorola Mobility Holdings Inc., the biggest acquisition in the Internet search giant’s history and one designed to make it a more formidable competitor to Apple Inc. and its iPhone.

The result, said Google’s chief executive, Larry Page, will be more and better smartphones for consumers. Google, which produces the popular Android software for smartphones and tablet computers, will be able to make its own hardware once it owns Motorola, which manufactures Droid smartphones and the Xoom tablet computer.

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“Together, we will create amazing user experiences,’’ Page wrote on the company blog.

The acquisition has a strategic goal, as well: to protect Google and its Android software for smartphones and tablets against a host of costly patent lawsuits filed by its rivals. Motorola holds thousands of patents, which now will be owned by Google, giving the search giant a stronger hand in court. Android products are “under threat from some companies who are looking to use patents to compete,’’ said David Drummond, Google’s chief legal officer.

Google expects the deal to be finalized by the end of 2011 or early 2012, after review by antitrust regulators in the United States, the European Union, and other countries.

Motorola Inc., founded in 1928 in Chicago, developed the world’s first commercial cellphone service in 1983. Motorola Mobility, its mobile phone operation, was spun off as a separate company in January.

Android began as the product of a Silicon Valley start-up company with a software development facility in Cambridge. The company was purchased by Google in 2005, and the software has become the world’s most popular platform for mobile devices like smartphones and tablets. Every major US carrier and 231 wireless providers around the world sell Android devices.

As a result, sales of Android devices far outstrip those for the iPhone and iPad, which run Apple’s iOS software.

Page said yesterday that more than 150 million Android-based phones and tablets have been activated, with 550,000 coming online every day.

The research firm Gartner Inc. estimates Android has 38.5 percent of the worldwide market for mobile device software, compared to 19.4 percent for Apple’s iOS, and by next year Android’s market share will reach nearly 50 percent.

For Google, the biggest advantage of the deal may be getting Motorola’s portfolio of technology patents. Google has been under intense attack by competitors who claim Android violates some of their key patents. Last week, a German court ordered Samsung Group of South Korea to stop selling Android-based Galaxy Tab tablet computers in most of the European Union, after Apple said the Google software infringed on some of its patents.

Other lawsuits against Android, including one filed last year by the giant database company Oracle Corp., are pending. One small Boston company, Skyhook Inc., has filed suit, saying that Android’s navigation technology infringes on several of its patents.Continued...

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US economy dealing blow to Obama's 2012 hopes

  With every gloomy economic report, debt crisis and mood swing on Wall Street, US President Barack Obama's fight for re-election in 2012 gets a little tougher.

The recent rash of bad economic news has deepened a sour public mood and threatens to turn a re-election campaign that Democrats once hoped would be a cakewalk into an unpredictable brawl.

"The economic head-winds Obama faces are extraordinarily difficult," said Karlyn Bowman, a public opinion analyst at the American Enterprise Institute think tank.

"The level of public pessimism and the duration of the negativity is something I haven't seen before," she said. "It's a performance-based job, and people want to start seeing the economy turn around."

Polls show at least two-thirds of Americans think the country is headed in the wrong direction, consumer confidence is hitting two-year lows and majorities disapprove of Obama's handling of the economy.
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His job approval was slumping even before last week's global stock sell-off and twin debt crises in Europe and in the United States, which featured a US credit rating downgrade and chaotic talks on a deal to raise the US debt ceiling.

In the last week of July, Gallup put Obama's approval at a weekly low of 42 percent.

A Quinnipiac University poll taken after the debt-ceiling deal last week found a majority in the battleground state of Florida did not think Obama deserved re-election. His approval among independents in the state plunged from a 47-45 percent split in May to 61-33 percent disapproval now.

"Elections with incumbents are always referendums on the incumbent, and the first question for voters is 'does he deserve another term?' At this point, these numbers show the answer is not necessarily yes," Quinnipiac pollster Peter Brown said.

The president's slump gives new hope to Republicans, who saw several potential contenders pass on a 2012 White House race earlier this year amid speculation Obama would be too strong and too well financed to lose re-election.

Republicans plan to remind voters often of the job losses, stalled economic recovery and stagnant housing market on Obama's watch. They stepped up their criticism of the president after Friday's US credit downgrade.

'OBAMA NOT WORKING'

"Barack Obama has been in office for three years and what he's done hasn't worked. It's time for him to go," Republican contender Tim Pawlenty said while campaigning in Iowa.

Republican presidential front-runner Mitt Romney has signaled a potential general election strategy, shadowing Obama's travels around the country with targeted criticism of the president's economic record in those regions.

When Obama returned home to Chicago to celebrate his birthday last week, Romney aired a Web ad slamming Obama's economic leadership and saying Chicago had seen a 48 percent increase in unemployment under Obama.

In recent speeches, Obama made clear he wants to focus on spurring job growth now that the debt-ceiling talks are done. He welcomed Friday's jobs report showing the unemployment rate ticked down slightly to 9.1 percent but said more was needed.

He will need to show significant improvement in the jobless rate to ease public worries, and he will need to do it early enough in 2012 that it sinks in with voters.

Obama also faces a tougher political map next year, with his approval plunging in traditionally Republican states he captured in 2008 like Indiana and North Carolina and in critical Rust Belt states like Ohio.

"I'm a Democrat but there is no sugar-coating it, things aren't good," said Democratic consultant Dane Strother. "The only thing on Obama's side right now is time. A week is an eternity in politics and we have 15 months."

Polls show Obama remains personally popular, and Democrats find hope in 2004. That year many voters unhappy with President George W. Bush's performance were reluctant to oust him amid the Iraq war and economic challenges.

"When people are frightened, they are more likely to stick with the guy they know than take a chance on the guy they don't know," Democratic strategist Karen Finney said.

"They still like Obama. As long as people feel like he's trying and he's making some progress, that matters," she said.

Republicans, beset by internal battles between conservative Tea Party movement activists and a more moderate pro-business faction, also must provide a viable challenger. Romney trails Obama in polls and faces a challenge winning over his party's own conservative base.

"At the end of the day it's two people, one on one, and it will be a new dynamic," Strother said. "But there is no question if 15 months from now the economy is in the tank, the election will be tough for Obama. Doable, but tough."

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