Microsoft Corp has announced a $1bn buyout of Google, the company that runs Google Search.
The buyout will take place in the first quarter of 2018.
The deal, which will allow Microsoft to acquire an 85% stake in Google for around $1,800 per share, will also see Microsoft gain control of Google’s mobile business.
The deal follows Google’s $400bn takeover of the social networking site Instagram in 2016.
Microsoft said the purchase of Google is part of its “long-term strategic plan” to expand its expertise in mobile computing, mobile advertising and analytics and search.
“We are excited to partner with Google and its passionate team of employees and to transform the world’s most popular search engine into a premier digital advertising platform for brands, brands, content publishers and advertisers,” said Microsoft Chief Executive Satya Nadella.
“With the help of Google we can reach billions of consumers across the world with the best advertising experiences, from search to search and from search results to advertising.”
In the deal, Microsoft will become the largest shareholder of Google and will also have a 10.4% stake of the search engine.
Google is based in Mountain View, California.
The company will be able to use Google’s technology and expertise to build the next-generation of search, search, and search-related products and services.
The purchase of a significant amount of Google shares has been anticipated for a long time.
In July 2017, Google’s stock fell as much as 2.4%.
However, analysts have said it is unlikely that the deal will affect the Google’s share price as much.
“Google is currently in a strong position with its large cash position, which can enable it to weather the market’s cyclical swings in the future,” analyst Alex Tabarrok at RBC Capital Markets said.
“Google’s stock has risen significantly in recent weeks as the company has announced it will launch a search engine, and the company is in a more favorable financial position.
The company’s cash position is now about 70% of its current market capitalisation.
The stock will likely fall even further as the search market continues to strengthen.”
The deal is a big deal for Microsoft as it has long sought to expand the scope of its mobile computing businesses.
In April, the software giant bought the US-based mobile operating system maker Nokia.
Microsoft has long been looking to make its mobile software work across multiple platforms.
In 2016, it bought rival Amazon.com for $775bn, and has recently been pursuing deals with companies such as Microsoft and Nokia.
It is also looking to expand into online advertising, where it has been experimenting with ad networks like DoubleClick and DoubleBid.