Rumor: Amazon in talks to buy HP's webOS unit

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Another day, another webOS acquisition rumor. This time word on the grapevine is that Amazon is seriously interested in picking up what's left of Palm, and that its current parent company HP is more than ready to rid itself of the once-prominent mobile device manufacturer it acquired last year for $1.2 billion.

Amazon is not alone in courting Palm, according to VentureBeat's sources, but it's the "closest to finalizing the deal." The site notes a strong tie between the two companies as Jon Rubinstein, former Palm CEO and current senior vice president of product innovation at HP's Personal Services Group, joined Amazon's board late last year. So far neither Amazon nor HP have commented on the rumors, however.

HP announced that it was splitting up its webOS business by shifting the software development unit to a different part of the company and stopping hardware production altogether. With this the TouchPad tablet was effectively killed off after just three months on the market; ironically becoming a success when its price was slashed to $100 in a fire sale.

But while the company struggled as it tried to turn Palm's webOS into a serious contender against the likes of iOS and Android, many believe Amazon could be a good fit for the platform. Their recently unveiled Kindle Fire tablet was met with plenty of enthusiasm and with a starting price of $199 the device is expected to be a major success.

The Kindle Fire is based on a heavily modified version of Android that hooks neatly into Amazon's various services, including their e-commerce store. By purchasing Palm, Amazon could redesign webOS to its liking and further differentiate its Kindle devices from the flood of Android tablets in the market. Then again, it would also face an uphill battle convincing app developers to start coding for a platform that has already failed under two companies.

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