UPDATED 06:44 EDT / JANUARY 30 2015

Microsoft CEO Satya Nadella NEWS

Microsoft invests in Cyanogen’s custom ROM to “take Android away from Google”

Microsoft CEO Satya Nadella

Microsoft is reportedly investing in an alternative Android firmware startup called Cyanogen, Inc., which builds the popular Cyanogenmod version of Google’s mobile operating system. The Wall Street Journal claims Microsoft would be a “minority investor” in a $70 million funding round that sees Cyanogen’s value skyrocket into “the high hundreds of millions”.

Cyanogenmod is based on the Android source code, but is heavily modified with more features and less restrictions than the official version. To begin with, users had to port the OS to their phones by themselves, but Cyanogen has recently begun supplying it directly to some OEMs, such as the OnePlus One. Cyanogen’s ultimate goal is to build a version of Android that’s totally independent of Google, without all the services the search giant insists OEM’s pre-install onto their phones.

“We’re attempting to take Android away from Google,” said Cyanogen CEO Kirt McMaster at a recent event in San Francisco.

It’s unlikely Cyanogen will fully realize that goal, but the idea of throwing a fly in Google’s ointment certainly seems appealing to Microsoft, whose own dismal performance in the smartphone niche has been extremely well documented.

Google’s weakness is that the core of Android is released under an open-source license, which means that anyone can take that code and modify it to their heart’s desire. That means it’s possible to remove Google’s services and other restrictions, as Cyanogen has done. Other companies have forked Android too, including Amazon.com Inc. with its Fire lineup, and the Chinese handset maker Oppo, whose phones are pre-installed with the ColorOS operating system.

The problem for Google is that these alternative Androids don’t all promote its own services, which means users don’t get to see the ads it runs on those services. And that’s where the vast majority of Google’s cash comes from. In response, Google has steadily been moving more services out of the Android core to bring the platform more under its control, but Microsoft’s investment in Cyanogen should help it to counter these problems.

Microsoft’s investment could also be a defensive one. Last October, a story in The Information claimed that Google was actually considering acquiring Cyanogen itself for a reported $1 billion. The fact Cyanogen is trying to create an alternative to the Google-dependent version of Android apparently makes it valuable to both companies, even if its only to be used as a pawn.

Then again, Microsoft’s move could be all about keeping developers interested in its own platforms. The lack of apps is often cited as the main reason why its mobile OS struggles to gain market share, and Microsoft has done much to try and encourage developers to stick with it – last year for instance, it invested in Xamarin, which sells a platform that lets Microsoft developers move their apps to iOS and Android relatively easily.

By investing in Cyanogen, Microsoft might gain more of an influence in the direction of Cyanogenmod, therefore making it easier for developers to build apps compatible with both it and Windows.

 


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