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Google Wants One Android Ring To Rule Them All

Google's (GOOG) approach to promoting use of Android, the mobile operating system it acquired in 2005, has been intriguing. Using a Microsoft (MSFT) strategy of working with many hardware vendors, the company has let its partners drive market share to almost 40 percent. One way it enticed manufacturers was to let them customize Android for their customers. But that may come to an end, or at least become a tightly reined process.

As Ashlee Vance and Peter Burrows point out in Bloomberg, Google is working quickly to take back control. Vendors can use the so-called open software, but only under Google's watchful eye, and there will be great restrictions in the changes they can make to the software. And this is exactly what will make Apple (AAPL), Microsoft (MSFT), and Research in Motion (RIM) happy campers. Google is treading some dangerous ground for 3 reasons:

  1. It's playing favorites with vendors. Combine that with the exposure to patent infringement lawsuits that seems to come with using Android and it encourages hardware companies to do business with someone else, like Microsoft.
  2. It's controlling what vendors do to a point that it has sparked complaints to the Department of Justice -- as if Google needs more face time with unhappy regulators.
  3. In a quest to gain control of Android, Google is destroying the very factors that made it successful.
Google's spin was that Android was open source. Manufacturers didn't have to pay royalties they way they did with Microsoft. They didn't have to watch the touch-screen explosion from the outside as Apple snapped up all the profitable market growth. They could use Android and get their development moving. Google would eventually make money from advertising. It was a formula that fueled the remarkable growth. But because of fragmentation and Android getting out of Google's control, that's now over:
This is the new reality described by about a dozen executives working at key companies in the Android ecosystem. Some of those affected include LG, Toshiba, Samsung, and even Facebook, which has been trying to develop an Android device. There have been enough run-ins to trigger complaints with the Justice Dept., according to a person familiar with the matter. The Google that once welcomed all comers to help get its mobile software off the ground has become far more discriminating--especially for companies that want to include Google services such as search and maps on their hardware. Google also gives chip and device makers that abide by its rules a head start in bringing Android products to market, according to the executives.
In one sense, Google has taken a step toward becoming Microsoft. Even though Google says it's only interested in ensuring quality and a predictable customer experience, the company is still taking the first steps to control how others use the software. Reportedly, this even extends to vetting changes that companies want to implement -- including using Microsoft Bing as the search engine instead of Google's own. It wouldn't be surprising if this had been the goal all along: get vendors hooked, and then tie them down.

In another sense, by playing favorites, Google moved beyond what even Microsoft dared to do, if the report is correct. And that's highly dangerous ground. Not only does it wave a red flag in front of regulators, but combined with the patent infringement suits it has attracted to its partners, Google is increasingly making itself a liability. Motorola (MMI) has already exhibited signs of creating an alternative choice for a mobile operating system. How long before others also start to look for the exit from Androidtown?


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