Investopedia: Google Pays Big Money To Be More Like Apple

Apparently, it is not enough to control the software and allow others to design the box. That would seem to be one easy conclusion to reach from Google's (Nasdaq:GOOG) announcement on Monday that it had reached an agreement to acquire Motorola Mobility (NYSE:MMI) for $12.5 billion in cash. With this deal, Google is now clearly a player in the hardware space, but it is uncertain the extent to which this is a threat to the likes of Apple (Nasdaq:AAPL) or an opportunity for the likes of Microsoft (Nasdaq:MSFT). 

A Whopper of a Deal  
There has been much speculation of what Google might do with its $30 billion-plus cash hoard, and now we know that a big chunk of it is going towards a large risky acquisition. Google will be paying $12.5 billion in cash for Motorola Mobility, though that price drops closer to $7 billion after subtracting net cash, investments and deferred tax assets. At the announced value of $12.5 billion, the $40 per share price represents a 63% premium to Motorola's prior close. On an adjusted basis, Google is still paying well more than 20 times trailing EBITDA but a little more than half of trailing revenue. 


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