Per the GGP post, they can use Android, they wouldn't be competing with it. They can leverage their market position to create an additional Android app marketplace, or produce a suite of apps that create a Yahoo! integrated experience on other Android devices, whether they distribute these in their own store or someone else's. Android manufacturers already exist, establish a relationship with them and they can start churning out Yahoo!/Android devices in addition to their Google/Android B&N/Android and Amazon/Android devices. The device manufacturers are competing with each other and Apple for the market. They can be promiscuous with companies seeking to create X branded Android devices. They get to rely on their existing production infrastructure and design database, and they get paid by Brand X to create a custom design, it's not out of pocket for them.

The competition would be with the Google/Amazon branding, but Yahoo! already has a relationship with millions of customers, many of whom already own Android devices. Give them better Yahoo! integration into their existing devices + the future option of migrating to a Yahoo! branded device.