The largest online store Amazon.com is negotiating with Hewlett-Packard over possible acquisition of Palm/webOS division in a bid to create its own mobile platform to compete against Apple, Google and Microsoft.

Amazon has been the biggest online store for over a decade now and it continues to grow its core business. But in order to be competitive in the new era of always connected mobile devices, one needs to be on those mobile devices. Even though apps like Kindle reader for various mobile platforms just work and get Amazon to its clients, the surest way to secure a place in the always connected world is to obtain its own mobile platform/eco-system that will propose all the technologies, tools and products that Amazon has to offer.

As HP is looking forward to get rid of its personal systems group (PSG) and Palm/webOS division that it acquired last year for $1.2 billion, Amazon appears to be "closest to finalizing the deal, among a handful of contenders", according to a publication by VentureBeat web-site that cites a well-placed source.

Given the fact that there are a number of potential buyers of webOS/Palm division from Hewlett-Packard, it is very likely that Amazon may be among them. Among other contenders may be strong companies like Facebook, HTC, Lenovo, ZTE and other. Therefore, the current rumour should be considered as a reflection of ongoing proceedings, not as an imminent deal.

By launching Kindle Fire media tablet this week, Amazon clearly showed that it wants to compete head-to-head with other big companies for mobile businesses. The question, however, is how far Amazon wants to go and whether it strategically needs its own mobile platform to compete against Apple, Google and Microsoft on all fronts.

Interestingly, but Jon Rubinstein, the former chief exec of Palm and the head of the division at HP, said in an interview that he would like a partner like Amazon to license the webOS and create innovative devices to expand HP's webOS ecosystem.

"We would like a partner that would allow us to expand the webOS ecosystem... There’s a variety of different sets of a characteristics to qualify as a good partner. I would say Amazon would certainly make a great partner, because they have a lot of characteristics that would help them expand the webOS ecosystem. As to whether there’s been discussions or not... that’s obviously not something I’m going to comment about," said Jon Rubinstein in an interview with ThisIsMyNext web-site.

Amazon and HP did not comment on the news-story.

Tags: Amazon, webOS, HP, Palm, Business, Apple, Google, Microsoft