[Infowarrior] - Google to offer Chrome desktop OS

[Richard Forno]

Google to Challenge Microsoft With Operating System (Update3)
By Brian Womack

http://www.bloomberg.com/apps/news?pid=20601087&sid=aVidrsL6yQYY#

July 8 (Bloomberg) -- Google Inc., owner of the most- visited Internet  
search engine, plans to release a computer operating system to  
challenge the dominance of Microsoft Corp.’s Windows.

The software will be based on the Chrome Web browser, Mountain View,  
California-based Google said in a blog post. It will be designed at  
first for low-cost laptops called netbooks. The company is in talks  
with partners on the project and computers running the software will  
be available in the second half of 2010, it said.

Google’s new operating system aims to take on Microsoft’s flagship  
Windows product, which runs about 90 percent of the world’s personal  
computers. The plan escalates the two companies’ rivalry, which  
extends to Web browsers, Internet search and business applications  
such as word-processing and spreadsheet programs.

“There is a possibility that the new OS can break the paradigm  
Microsoft and Intel created over the past 20 years,” said Yukihiko  
Shimada, a computer analyst at Mitsubishi UFJ Securities Co. in Tokyo.  
“There is plenty of business opportunity for Google in this market.”

Google said it’s working with computer makers to introduce a number of  
netbooks next year, without identifying any of the companies. The  
Chrome OS will be open-source, meaning the program code will be open  
to developers, Google said. The software will work on top of the Linux  
operating system.

Netbook Competition

Frank Shaw, a spokesman for Redmond, Washington-based Microsoft,  
declined to comment. Windows accounted for 28 percent of the company’s  
$60.4 billion annual revenue in the 12 months ended June 30, 2008.

Microsoft has stepped up its efforts in the netbook market. It said in  
May it plans to remove a restriction of running three applications at  
a time on its forthcoming Windows 7 Starter Edition, which is designed  
for netbooks. The announcement eliminated one of the most significant  
differences between the basic edition of the operating system and a  
pricier one.

Google rose 1.4 percent to the equivalent of $402.13 in German trading  
as of 11:00 a.m. in Frankfurt. Microsoft slipped 0.2 percent to the  
equivalent of $22.49. Google’s shares have climbed 29 percent in U.S.  
trading this year, while Microsoft has gained 16 percent.

Online-Use Strategy

Google’s Chrome OS is consistent with the company’s focus on getting  
people to use software online, unlike Microsoft‘s traditional approach  
of providing software on the computer itself. Google started a  
business-software lineup in 2007 that lets users access services such  
as spreadsheets and word- processing documents via the Web, just as  
anyone might access the search engine or Google News.

Getting more people online may help Google sell more advertising,  
which delivers more than 90 percent of its revenue.

“We hear a lot from our users and their message is clear - - computers  
need to get better,” Google said. “The operating systems that browsers  
run on were designed in an era where there was no Web.”

Computer makers such as Acer Inc. and Asustek Computer Inc. already  
have plans to offer computers running Android, an open- source  
operating system backed by Google and initially designed for mobile  
phones. Acer, the world’s second-largest laptop maker, said last month  
it plans to release a low-cost notebook powered by Android. Asustek  
Computer has also developed a netbook that runs on Google’s software.

‘Creates More Options’

“Having another OS or another interface does create more options, and  
with the weight of the Google name behind it, does lift its  
prominence,” said Bryan Ma, a computer analyst at IDC in Singapore.

Google said that while the Chrome OS is separate from Android, the two  
will overlap in some areas. The Chrome operating system is designed to  
save users from having to deal with viruses and security updates,  
Google said.

“Google Chrome OS is being created for people who spend most of their  
time on the Web, and is being designed to power computers ranging from  
small netbooks to full-size desktop systems,” Google said. “While  
there are areas where Google Chrome OS and Android overlap, we believe  
choice will drive innovation for the benefit of everyone, including  
Google.”

Consider ‘Anything Beneficial’

Tony Chen, chief operating officer of Asustek’s notebook unit said by  
phone the company will consider “anything that’s beneficial to users.”  
Fujitsu Ltd. spokeswoman Nozomi Endo said the company will monitor  
market conditions before deciding whether to introduce products using  
Google’s operating system.

Faith Brewitt, a Dell Inc. spokeswoman, and Hewlett-Packard Co.  
spokeswoman Liana Teo didn’t answer calls to their Singapore offices.  
Spokespeople for Acer, Sony Corp., Samsung Electronics Co., NEC Corp.,  
Panasonic Corp., and Toshiba Corp., declined to comment.

The Chrome OS -- which will run on traditional Intel Corp.- based x86  
chips along with semiconductors designed by ARM Holdings Plc -- will  
work on lightweight netbooks along with more powerful computers,  
including desktop PCs, Google said.

Google’s Chrome still faces an uphill battle against Microsoft’s  
browser. Chrome, which was unveiled last year, had 1.2 percent market  
share in February compared to 67 percent for Microsoft‘s Internet  
Explorer, according to Net Applications, which tracks Web statistics.

In May, Microsoft introduced a search engine called Bing that has  
enhanced shopping, travel and sorting features. Bing’s market share  
climbed to more than 10 percent in June, according to Comscore Inc.

Google’s search engine is No. 1 in the U.S., holding more than 60  
percent market share. Microsoft is No. 3 with less than 10 percent of  
the market in the U.S. during May, according to ComScore.

To contact the reporter on this story: Brian Womack in San Francisco  
at Bwomack1 at bloomberg.net;

Last Updated: July 8, 2009 06:18 EDT