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NEW YORK (CNNMoney) -- The so-called "Merger Monday" continues to live up to its name, after Google announced an acquisition of handset maker Motorola Mobility Holdings for a 63% premium.
The $12.5 billion purchase is the biggest in Google's history. The deal has many wondering why Google is entering a low-margin hardware business. The most likely rationale is providing patent protection for its Android OS, against the constant litigation attacks from Apple (AAPL, Fortune 500) and Microsoft (MSFT, Fortune 500).
Motorola (MMI) provides more than 17,000 existing and 7,500 pending patents worldwide -- in addition to $3 billion in the bank, reducing the actual worth of the deal to $9.5 billion.
After the news broke, Google (GOOG, Fortune 500) fell 3% in afternoon trading. Shares of the world's biggest search engine are down 7% since January this year, and 20% below their all-time high price -- reached in 2007.
These are among the most-discussed themes on StockTwits Monday:
techinsidr: $GOOG will likely use the $MMI patent portfolio to help shield the fellow android partners (HTC, Samsung, etc)...
weissben: Seems like @LarryPage needs to focus - competes w $FBOOK 4 social, $AAPL, HTC, LG, SSUNG, $HPQ, $NOK 4 mobile...$GOOG
sspencer_smb: In my opinion $GOOG overpay for $MMI is direct statement to $AAPL.
lopez_m: If they keep the hardware business then the answer is clear and the patent reason is simply a publicly acceptable reason. $GOOG
dkberman: Before you go crazy about price that $GOOG is paying for #Motorola, remember $MMI has $3 billion of cash. Deal only $9.5b.
danieldirico: If Google owns Motorola, the OS+Phone model seems set to run: iOS+Apple, Palm+HP, Android+Motorola, Microsoft+?? $GOOG 
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