google's big bet on the mobile future

Google made a $12.5 billion bet on its future — and the future of big Internet companies — lies in mobile computing, and moved aggressively to take on its arch rival Apple in the mobile market.

The Silicon Valley giant, known for its search engine and Android phone software, rattled the tech world with its announcement that it would acquire Motorola mobility Holdings, allowing it to get into the business of making cellphones and tablets.

The acquisition, Google’s largest to date and an all-cash deal, would put the company in head-to-head competition with its own business partners, the many phone makers that use Android software, as well as with Apple.

Under the terms of the deal, which is expected to close by early 2012, Google will pay Motorola Mobility’s shareholders $40 a share, a 63 percent premium to Friday’s closing price. Although Motorola had casual talks with prospective suitors earlier this year, the sale of the Nortel patents at a $4.5 billion price tag encouraged Motorola’s directors to pursue a sale more actively, according to people briefed on the matter. Google, led by Mr. Page, emerged as the front runner, Motorola’s board gave the green light.

Shares of Google fell 1.16 percent on Monday, to $557.23, while shares of Motorola Mobility added 55.78 percent, to $38.12.