According to a Gigaom "exclusive," Motorola Mobility was in talks with Microsoft, as well as other parties, to discuss acquisition.  Their sources tell them that Microsoft was primarily interested in Motorola's 17,000 patents and 7,500 patent applications, which would have have become a WMD of sorts against Google.  Acting in self-defense, Google moved about 5 weeks ago, opening talks of their own with MM, which included CEO Larry Page and Motorola CEO Sanjay Jha, though more recently, Android co-founder Andy Rubin was brought into the mix.  Allegedly, Motorola preferred a deal with Google because Microsoft was only in it for the patents, and no the hardware manufacturing.  The result, Google's $12.5 billion payout or a 63% premium over previous stock estimates of Moto. Good deal?

If these claims are accurate, it is the next giant step in a patent war that's been brewing between Google and Microsoft for a while now.  It is also a possible sign of the decline of Android and the rise of Windows Phone 7.  Google now owns one of the many companies that use its Android platform, and has become a competitor to itself.  Google's new position as a player in the manufacturing game could drive other companies away from Android and into the arms of another operating system, say, perhaps Windows Phone.  Throw Microsoft's deal with Nokia, and now you have what could be a huge boost for WP7.

While this has the potential to be exciting for those of us who would like to see Windows Phone flourish, the situation is, sadly, one more example of how patents are being used to crush competition, rather than to bolster innovation. 

Source: Gigaom