Kindle Fire Threatens Google More Than Apple

Much of the coverage of Amazon’s announcement of the Kindle Fire has, understandably, focused on the potential competition with Apple’s iPad. While the two products are clear competitive in the sense that some consumers will pick one and forego the other, it is entirely possible that Amazon will sell millions of Fires without making much of a dent in iPad sales.

A much more interesting issue is the impact of the fire on Google. At first glance, Amazon and Google are sort of partners in the Kindle project. The Fire runs on a version of Google’s Android software and Google is the default search engine on the tablet (a privilege for which Google is probably paying.) But a couple of things Amazon has done take aim at Google in ways that have to be causing some discomfort at the search giant, which is already facing serious challenges to its core businesses from Facebook.

First, there’s the matter of Android. To understand what going on, you have to realize the distinction between “Android” and “Google Android.” Android started out as an open-source operating system, but Google has been progressively tightening controls.  To use any Google branding or to have access to Google services such as the Android Market or the Google Maps app, a manufacturer must meet Google’s terms and conditions. For the current Honeycomb version of Android, “Google Android” is the only option because Google has not released the source code.

Amazon took a different route. Earlier versions of Android are freely available and Amazon took the code for Android 2.3 (Gingerbread) and modified it for its own purposes. This is perfectly acceptable and legal under the Apache 2.0 license that covers Android. It’s not clear how compatible the Fire software is with existing Gingerbread apps, but it is clear this is not a huge concern of Amazon–and that there is nothing Google can do about it.

Google now faces the very real prospect that the first, and perhaps only, successful Android tablet, while built on a Google software platform, has nothing to do with Google. In particular, it does not use any of the Google services, other than basic search, that were Google’s rationale for building the Android platform. The Android business model was giving the software away, but making money off the users it delivered to Google services. Fire, however, is designed to use and promote Amazon’s services, not Google’s. In a very real sense, Amazon may just have stolen Android out from under Google’s nose as far as tablets are concerned.

(Related: Amazon Plans on Stealing Android from Google)

As Chris Ziegler writes on ThisIsMyNext.com:

Amazon now stands poised to take one of Google’s most critical assets — Android — and turn it against them. Praise for the Fire’s deeply-customized version of Android 2.3 has been nearly universal, and make no mistake, there’s no going back; this is Amazon’s operating system now, built atop a road-tested core that Google served up free of charge.

The other significant threat Google is Fire’s SILK browser. When running in its default mode, the browsers computational chores are split between the Kindle and Amazon’s Elastic Computing Cloud (EC2.) This architecture means that Amazon will be able to observe, and probably log, everything Fire users do on every web site they visit. (The SILK terms and conditions are silent on the uses that can  be made of this clickstream data beyond incorporating the existing Amazon privacy statement.)

Amazon has built its business through deep analysis of the data it collects from users of its sites. But until now it, like Google and Facebook, only has access to the clickstreams users generate while on their sites. With SILK, Amazon can observe what users do on every site they visit. The privacy implications of this are a subject for another time, but the wealth of data could give Amazon and enormous commercial advantage.

As Michael Mace writes on his MobileOpportunity blog:

This will be a fun space to watch. Apple and Google will both feel pressure to respond to Silk to prevent Amazon from getting a decisive lead in mobile web apps.  Maybe just the threat of Silk will be enough to finally drive some innovation in the mobile web platform.

I may be indulging in wishful thinking, but there’s a possibility that ten years from now we’ll look back on Silk as the single most important thing in today’s announcement.

Or not.  It depends on what Amazon’s agenda is, and they’re not telling.