Far be it from me to spread rumors. Actually, I love spreading rumors, just like Wall Street, blogs and about every other human as soon as they are big enough to whisper. “They,” the definitive source for all information, are saying that Amazon may be planning to purchase troubled Palm.

The Allure of Palm

Palm is kind of like the really attractive, bright kid in high school you were sure would do something awesome and world-changing, but wound up living in his parents’ basement playing World of Warcraft at 30. Palm has thousands of patents; the company is one of the originators of the smartphone. However, Palm’s US$ 1.2 billion HP acquisition last year was followed by a spectacular crash-and-burn of HP’s TouchPad anchored mobile business. This left many wondering if it was the end of days for Palm.

HP can’t exactly walk away from the purchase like a mistakenly acquired pair of ill-fitting jeans. A number of companies, such as HTC, have expressed interest in acquiring Palm from HP, but few details have been released. Now, it appears that Amazon has thrown its hat in the ring, and is closest to actually finalizing a deal.

Why Palm, Amazon Make Sense

Unlike some recent acquisitions, the Amazon purchase of Palm is a logical move. Amazon just released Kindle Fire, an Android-based tablet that costs around US$ 200. Although the tablet is built on Android, it has been so customized that it bears little resemblance to the slew of other Android devices. Additionally, former Palm CEO and current Palm executive Jon Rubenstein is a member of Amazon’s board of directors.

If Amazon acquires Palm’s webOS, it could ditch Android entirely and leverage webOS, and possibly avoid the patent-related legal troubles experienced by other Android device manufacturers. It would also position Amazon to compete against Google, which recently acquired Motorola Mobility. The acquisition would also put Amazon on the fast track to release a mobile phone to complement its tablet business.

Like all rumors, there is probably some truth in all of the conjecture, which will be revealed in time. As the mobile market continues to evolve to support a ravenous consumer market, this is only one of what will likely be a constant stream of changes and developments.  We will definitely keep eavesdropping on this deal to let you know what we hear. You should do the same for us.