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Google to buy Motorola Mobility. What's behind the sale?

Google makes its biggest acquisition yet, spending $12.5 billion on Motorola Mobility. But did Google want the phone manufacturer or its patents?

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Google is buying cell phone maker Motorola Mobility for $12.5 billion in cash Monday, Aug. 15, 2011, in what is by far the company's biggest acquisition to date. Pictured, attendees chat at May's Google IO Developers Conference in San Francisco.

Marcio Jose Sanchez/AP/FILE

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Google Inc. is buying cell phone maker Motorola Mobility Holdings Inc. for $12.5 billion in cash. It's by far Google's biggest acquisition and a sign the online search leader is serious about expanding beyond its core Internet business and setting the agenda in the fast-growing mobile market.

Google will pay $40.00 per share, a 63 percent premium to Motorola's closing price on Friday.

Google's Android operating system runs smartphones that compete with iPhones, BlackBerrys and Windows-based mobile devices. Motorola Mobility was separated from the rest of Motorola in January. The company has remade itself as a maker of smartphones based on Android, but has struggled against Apple Inc. and Asian smartphone makers.

"Motorola Mobility's total commitment to Android has created a natural fit for our two companies," said Google CEO Larry Page in a statement. "Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers."

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