Google's Chinese Mutiny Resurrected

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Seven months after search giant Google (NASDAQ: GOOGL  ) effectively blocked OEM Acer from launching devices based on Alibaba's competing Aliyun platform, the mutiny has now been resurrected. Aliyun was initially announced in 2011 but saw a major setback last year.

In September, Google said the device carried a "non-compatible version of Android," since Aliyun is an unsanctioned Android fork. As a member of the Open Handset Alliance, or OHA, Acer had certain obligations if it wanted to continue using the real deal -- obligations that Google kindly reminded the company of. OHA members are free to use competing operating systems, just not forked versions of Android.

There's been some debate over whether Aliyun was truly an Android fork. Former Android chief Andy Rubin said Aliyun used the same runtime, framework, and tools, while Alibaba considers it a distinct platform. Regardless, Acer stood down on its plans.

Alibaba just announced plans to reinvigorate Aliyun, which it is now renaming Alibaba Mobile Operating System, or AMOS. The company is starting a $160 million funding program to subsidize app development for the platform. OEMs will receive $0.16 per month for every AMOS phone sold, while also offering various revenue sharing incentives for developers.

The company already has five local Chinese OEMs onboard, which plan to release six new phones in China using AMOS. These are mostly low-profile names though, not relatively bigger players such as Acer. However, these companies do already sell Android phones, but it's not clear whether they're OHA members. After all, Chinese OEMs have made forking Android virtually a national pastime in the Middle Kingdom.

Android's fragmentation has gotten worse in recent times, and the open-source operating system is now segregated on the platform level. It's not just thousands of different hardware configurations to sift through; we're now talking about numerous distinct Android camps, most of which don't benefit Google directly. AMOS is just the latest example.

As one of the most dominant Internet companies ever, Google has made a habit of driving strong returns for its shareholders. However, like many other Web companies, it's also struggling to adapt to an increasingly mobile world. Despite gaining an enviable lead with its Android operating system, the market isn't sold. That's why it's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.

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