Google shocked the tech world this morning by announcing that it had a “definitive agreement” in place to buy Motorola Mobility for $12.5 billion or $40 a share—a 63% premium on Friday’s closing price. The move means that Google will for the first time be directly manufacturing Android phones, rather than simply licensing the operating system to others—though Google stressed that Android would remain an open platform.
“Motorola Mobility’s total commitment to Android has created a natural fit for our two companies,” Larry Page said in a statement. “Together, we will create amazing user experiences that supercharge the entire Android ecosystem.” Business Insider calls the deal a “game changer” that will put Google in more direct competition with Apple. It also notes that shares of RIM and Nokia are climbing in early trading, on speculation that Microsoft could be forced to buy one of them. (Read more Google stories.)