How Google Could Win in Cyanogen's Deal With Microsoft

High-quality Android forker Cyanogen just announced it's going to be including (deleteable) Microsoft apps on any phones that pre-load its version of the Android OS, giving it another step towards mass acceptance in the West. Could this threaten Google's dominance of Android? No, much to the contrary—it could help Google out of a bind that it's in right now.

Cyanogen has two targets. There's the largely Google-free Android world in China, and the extremely Googly Android realm in the rest of the world. Let's focus on the latter. In Europe, where Android has 80 percent-plus market share in some countries, Google is now under competitive review by pesky regulatory authorities for potentially being an abusive monopoly.

Mobile manufacturers and carriers have wanted a third mobile OS provider to balance out Apple and Google for a few years now, but they haven't been able to properly nurture one. Microsoft, Firefox, and Amazon have all tried and failed, to some extent. I have relatively little sympathy for mobile operators that say they want Windows Phone to succeed and then don't promote it properly, but the fact is, it hasn't succeeded.

So here comes Cyanogen: Android compatible, even more than BlackBerry 10 is, and able to work on existing hardware. It could be that third force, if manufacturers and operators get behind it.

It's Good to Be Big, But Not Too Big
If Cyanogen succeeds, that could take European pressure off of Google while not particularly endangering Google's advertising business.

Back in 1997, Microsoft made a $150 million investment in Apple. At the time, Windows 95 was ascendant and Apple was seriously struggling. Microsoft was also about to go to trial, in 1998, in the extremely long, slow federal antitrust case over Windows and Internet Explorer.

It was to Microsoft's advantage to have a competitor that was big, but not too big, and to show that it could play well with others. That way, it could go to regulators and show that it was neither a monopoly nor abusive. That didn't work, but it's a good strategy.

In the Cyanogen/Google case, if Cyanogen gets somewhere, Google can tell regulators that the mobile OS market isn't fixed; it's vibrant and competitive, with new players appearing all the time.

And as long as Google has most of the Android market share, app developers will want to publish to Google Play first, using Google's ad services. Even if Cyanogen starts its own app store, it probably won't want to break those links and force app developers to recompile, so Google will still make money from Cyanogen phones. And it won't look like a monopoly.

Recommended by Our Editors

How Google Could Threaten the Web

The App Problem
But—oh yeah—that app store problem.

Cyanogen has complained, publicly, about Google's dominance of the app store market outside China. And the rocky semi-success of Amazon's Appstore shows that it's tough to get developers, once again outside China, to pay equal attention to multiple app stores.

And if Cyanogen relies entirely on Google Play, that will hurt Google's regulatory argument that there's vibrant competition. Google Play becomes the monopoly.

A partnership with Amazon would probably be more useful for Cyanogen than trying to build its own app store from scratch. But Cyanogen's success in the mass market, beyond APK-loving ROM hackers, will really rely on finding a good way to get third-party applications to its phones. Google might secretly cheer it if it does.