Google Reader's mobile web app works really well and it has a great interface, so there aren't many reasons to create a native application for Google Reader. The main issue is that the application doesn't work offline, but this is a feature that could be easily implemented.
Instead of improving the mobile web app, Google decided to release a native Android app for Google Reader. The application supports multiple accounts, synchronizes your subscriptions and works offline. It also lets you search your feeds -- a feature that's inexplicably missing from the mobile web app.
Google Reader for Android uses infinite scrolling, has bigger touch areas, it integrates with the operating system's "send to" actions and has a neat trick in the settings that lets you navigate between articles using your phone's volume keys.
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