Amazon Is Trying To Buy Palm -- Here's Why It's A Great Idea (AMZN, HPQ)

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Amazon is in advanced negotiations with HP to buy its flagging Palm unit, VentureBeat reports.

Palm makes the webOS mobile operating system. The software is well-regarded by industry observers, but Palm devices have failed in the marketplace. 

HP bought Palm for $1.1 billion a year ago, but it is now discontinuing webOS devices and looking for a future for webOS. 

Amazon buying Palm is a very good idea:

HP isn't going to do anything interesting with webOS. HP is pivoting to enterprise software, doesn't want to make tablets and mobile phones, and is generally bogged down in its internal vicissitudes. Palm is going to be cheap. Right now, all Palm has is good intellectual property, and maybe a few talented people, including former Palm CEO Jon Rubinstein, a highly regarded industry executive, who now has a dead-end "product innovation job" at HP and, VentureBeat notes, recently joined Amazon's board. Amazon can almost certainly buy Palm for a fraction of its original price.Amazon needs its own mobile platform. Amazon's Kindle Fire tablet uses Google's Android as the "guts" of its software, but that is invisible to the end user. Amazon has created its own software environment in the tablet, including its potentially revolutionary Silk browser. Android has an IP cloud over it (patent problems), and, over the long term, Amazon needs its own platform to run its own tablets. As Amazon CEO Jeff Bezos said when unveiling the latest Kindle, he envisions Kindle as "an end-to-end service." It means Amazon needs to own the guts of the software as well. And WebOS would give it that.Amazon won't have to junk its Android app store. Amazon has invested heavily in its own Android app store to have its own app ecosystem to run alongside its Android fork. Android apps are written in the programming language Java and versions of webOS can run Java apps, so it should be possible (though perhaps slightly tricky) for Amazon to get the apps on its app store to run on the webOS platform.

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