Google today announced in a blog post an agreement to acquire Motorola Mobility for $12.5 billion, a 63 percent premium to the closing price of Motorola Mobility shares on Friday, August 12, 2011. This means that Google will start creating mobile phones by itself. This can be a start of a bigger competition between Android and iOS or Google Phones and iPhones. For people who are still not sure if they gonna purchase the iPhone or maybe an Android based Phone, this news “can” be the start of a faster growing Android Market Share.

Motorola Mobilitys press section quotes: Motorola CEO Sanjay Jha, Google CEO Larry Page and the search firms senior vice president of mobile Andy Rubin as saying that this strategic acquisition will “enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing.” It will be interesting to see how other Android backers react to the news that their operating system provider is in bed with one of their rivals. Google on its part says Motorola Mobility will “remain a licensee of Android and Android will remain open”, adding they will run Motorola Mobility as a separate business.

The Official Google Blog quotes: We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to “protect competition and innovation in the open source software community” and it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Googles patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.

The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences. I am confident that these great experiences will create huge value for shareholders.

Source [GoogleBlog & 9To5Mac & Motorola]