Hewlett Packard Co has decided to open its webOS mobile operating system to developers and companies, potentially taking on Google Inc's free Android platform that is popular with handset makers.

HP, which acquired webOS in a $1.2 billion purchase of Palm in 2010, had been trying to figure out how to recoup its investment after a failed foray into the smartphone and tablet market.

HP Chief Executive Meg Whitman said the company looked at a number of options for webOS, including a sale and shut down of the division.

The technology giant will make webOS available under an open source licensing agreement, but it has still not hashed out the terms of the licensing deal it plans to offer.

There are a number of open source projects that can be used as examples for deciding the structure of licensing, including Android and browser Mozilla.

The company plans to solicit ideas from developers before deciding on the licensing terms, Whitman said.

We like the adoption of Android. It's growing like wildfire with a big developer community and hardware community, Whitman said, adding that HP would like to avoid fragmentation of the software that currently plagues Android.

Whitman also said HP may get back into the consumer tablet market in 2013 but it will not be making any more smartphones.

The future of webOS had been in limbo since August after HP killed its flagship webOS-based TouchPad tablet following poor sales.

While Google has the world's most-used mobile system with over 550,000 devices activated every day, HP's webOS could be an alternative to companies apprehensive that the Web search giant may compete with them directly in the smartphone handset market through its $12.5 billion purchase of Motorola Mobility.

The webOS platform, which had been HP-only software, is widely viewed as a strong mobile platform, but has been criticized for having few applications -- an important consideration while choosing a mobile device.

Most developers prefer to work on Apple Inc's iOS or Google's Android because both are on millions of devices -- unlike webOS.

Making it open source changes the rules of the game and has the potential to make (webOS) more appealing, said Van Baker, an analyst with Gartner. It presents a potential challenge to Android, but I wouldn't call it a real challenge until we get a little further down the road.

HP still has to make sure the code is available and the tools for developers are as robust as those provided by Android to succeed, he added.

HP has not revealed its plans for any mobile hardware after the TouchPad was killed.

(Reporting by Poornima Gupta; editing by Gary Hill and Andre Grenon)

Meg Whitman HP Software