Bloomberg just posted about Google’s next power move: Giant Search Engine Company to release full fledged OS
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.
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.
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@bloomberg.net
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