Amazon.com Plans to Open Online App Store to Rival Google’s

Amazon.com Inc., the largest online retailer, is opening a store to sell software for the Android mobile-operating system, stepping up rivalry with Google Inc.

Amazon will keep 30 percent of the revenue generated by applications sales, while developers will get 70 percent, the Seattle-based company said. Amazon didn’t say when the store will open.

The retailer is aiming to tap rising demand for games and entertainment that can be downloaded on mobile phones. That market, which is being pursued by more than 30 app stores, may rise to $40 billion by 2014 from $14.3 billion last year, according to Booz & Co. Competitors are trying to grab business from Google’s own Android Market, which has rankled some users for being cumbersome.

“There is a huge volume of apps out there,” said Aaron Rubenson, who oversees Amazon’s app store. “The challenge that creates for the Android ecosystem is it can be hard to find the products that are relevant to you. We’ve spent years developing an e-commerce platform that helps customers find relevant products amidst a massive selection.”

One-Click Option

The Amazon app store can be downloaded to a phone or tablet computer. Customers can also buy apps on Amazon.com using a one- click option that links back to their Amazon account, rather than entering a credit-card number manually for each purchase. The service will start off in the U.S., Rubenson said.

Google, owner of the biggest Internet search engine and creator of the Android operating system, also gives developers 70 percent of app sales, while splitting the rest with carriers and payment processors.

Amazon dropped $3.85 to $169.44 at 4 p.m. New York time on the Nasdaq Stock Market. The stock has slipped 5.9 percent this year. Google, which has gained 1.1 percent this year, fell $12.64 to $600.76.

Applications for Apple Inc.’s iPhone and iPad, which compete with Android-based devices, are available only through Apple’s own app store.

To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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