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Amazon wants to buy Palm: report

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Amazon is in advanced negotiations to purchase Palm from Hewlett-Packard, reports Venture Beat. According to a “well-placed source” who spoke with the publication, HP wants to shed the struggling smartphone brand quickly.

HP purchased Palm in July of last year for about $1.2 billion. Palm makes the respected webOS operating system. Unfortunately, it’s respected by a select few, and Palm has not found a way to sell its platform to the masses in any meaningful sense.

It would seem HP has been courting Amazon as a possible new parent company for Palm for a while. Palm CEO Jon Rubinstein joined Amazon’s board of directors last year, after the HP acquisition of Palm. And this July, he told This is my next that Palm was looking for new partners for webOS, and that “Amazon would certainly make a great partner because they have a lot of characteristics that would help them expand the webOS ecosystem.”

News of a possible Palm acquisition by Amazon comes at a time when HP itself is struggling to maintain its grip. The company recently fired its failed chief executive, Leo Apotheker, and replaced him with former eBay CEO Meg Whitman.

Amazon, on the other hand, just announced this week the release of four new Kindles, the Kindle Fire tablet, Kindle Touch e-reader, Kindle Touch 3G and a new $79 Kindle. In other words, Amazon is delving deeper into the world of hardware production, and making millions in the process.

From a distance, at least, this deal seems like a good idea for everyone involved. HP desperately needs to get its house in order, and that means cutting off the fat that’s keeping it from a nimble pivot to whatever business focus will help it regain composure and begin to thrive again. Amazon could surely get Palm at a discount, and would do well with its own mobile platform. The new Kindle Fire runs on Google’s Android OS – but it’s so heavily modified, you’d barely know Android is under there. Why not just go all the way with an OS of its own? And for that webOS may be the answer.