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Rumor: Amazon eyeing purchase of HP's Palm division for webOS Kindles

Amazon is said to be considering a purchase of Palm, the smartphone maker now owned by Hewlett-Packard, and its webOS mobile operating system.

If such a deal were to become a reality, it would allow Amazon to make future Kindle hardware based on its own software in webOS, rather than modifying Google's Android platform as it has done with the Kindle Fire, according to VentureBeat. The new color touchscreen Kindle Fire will go on sale this November for $199.

The Kindle Fire runs Google Android, but the software has been heavily redesigned and rethought, leaving very little resemblance to the original Android 2.3 upon which it is built. In fact, on the official page for the Kindle Fire, there's only one reference to Android, mentioning applications available through the Amazon Appstore.

Friday's report noted that former Palm CEO Jon Rubinstein, who left his position as Apple's iPod chief in 2005, joined Amazon's board of directors in late 2010. It cited a "well-placed source" as indicating that HP is looking to shed its Palm division as soon as possible, naming Amazon as the closest to purchase among a handful of prospective buyers.

"By purchasing the remnants of Palm, Amazon would have free rein to redesign webOS to its own liking, and it would be able to further differentiate its Kindle devices from the slew of Android tablets in the market," author Devindra Hardawar wrote.

HP bought Palm in April 2010 for $1.2 billion, promising future smartphones and tablets powered by Palm's webOS. But HP's first high-profile webOS product, the TouchPad tablet, failed to gain traction in the market against Apple's iPad, and was discontinued with inventory cleared out in a $99 fire sale.

HP's discontinuation of the TouchPad was part of a corporate shakeup in which the world's largest PC maker revealed it plans to spin off its PC business to focus on selling software. Those changes proved to be a last gasp for ex-CEO Leo Apotheker, who spent less than a year on the job before he was replaced last week by former eBay chief Meg Whitman.

Though Amazon is now said to be in talks to acquire webOS from HP, smartphone maker Samsung was previously named as another company interested in buying the mobile operating system. Later, HTC was also said to be another potential buyer, as Android-based smartphone makers look to differentiate their products from other competing Android devices.