Amazon Bypasses Google With New Tablet

Amazon's Kindle Fire tablet uses Android software but bypasses Google's project to extend its clout in Internet search and advertising.

NEW YORK (AP) -- Inc.'s Kindle Fire tablet uses Google Inc.'s software but bypasses Google's project to extend its clout in Internet search and advertising into tablets and phones, an analyst said Friday.

THE BACKGROUND: Amazon revealed its tablet Wednesday, and said it will go on sale Nov. 15 for $199. It's based on Google Inc.'s Android operating system, used by most tablets that are trying to compete with Apple Inc.'s iPad.

But Amazon has tossed out all the Google applications that ride on the Android kernel, including the Web browser, Gmail, application market place and mapping application. It's providing its own applications instead, like a "Silk" browser that sends traffic through Amazon's data centers to optimize it for tablets.

THE OPINION: The exclusion of Google's apps allows Amazon to capture more of the "revenue opportunities" of the tablet, said Sterne Agee analyst Shaw Wu.

"It will be interesting if other Android licensees follow suit. Android, even with its large base of users, is already struggling to make money as the mobile advertising market has arguably not been as big as expected," Wu wrote in his research note.

Android is "open source" software, meaning Google publishes the blueprints and allows anyone to use them. However, it makes its application available only to manufacturers whose phones and tablets meet certain standards.

THE STOCK: Amazon shares fell $1.44 to $221 in midday trading Friday. The shares are down about 5 percent since their peak Wednesday, as the tablet was being announced.

Google shares fell $6.45, or 1.2 percent, to $521.05 in midday trading. They're down about 4.5 percent from their peak Wednesday.

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