Amazon Fire Leaves Google Apps, Takes Android

Since Google Inc. (GOOG) introduced its Android operating system in 2007, the company’s strategy has been simple: Give it to developers for free and make money when consumers click ads on the Web or through apps. That model is hitting a snag.

Amazon.com Inc. (AMZN) and Chinese Internet giants Baidu Inc. and Tencent Holdings Ltd. are using Android as a building block for their devices, skipping preloaded applications such as Gmail, Google Maps and YouTube that generate ad revenue for Google, as well as its app store. Amazon’s Kindle Fire tablet, which is gaining ground on Apple Inc. (AAPL)’s iPad, comes with none of those apps.

“The Fire may be the best Android tablet out there, even though it’s the least Android-y of all of them,” said Noah Elkin, an analyst at New York-based research firm EMarketer Inc. “The Google experience is very much in the background.”

Mobile advertising is one of Google’s fastest-growing markets, withindustrywide revenue projected to rise to $20.6 billion in 2015 from $3.3 billion in 2010, according to Gartner Inc. With online traffic increasingly coming through apps instead of mobile browsers, Google’s push to wring mobile-ad revenue from Android could be impeded if more device makers emulate and succeed with Amazon’s scaled-back approach.

“Part of the reason Android is so important as an operating system is that it lets Google put its mobile services front and center,” said Ken Sena, an analyst at Evercore Partners Inc.

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Author: Malvaniya Prashant

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