This is going to be all about the business side of operating systems so if you find OS’s boring and passé at this point, don’t read this post… So Google announced this week that they are going to produce an operating system for netbooks. It is named Chrome operating system and note that it has the same name as their browser – that should tell us something. Keep in mind that a net book is simply a stripped down laptop that is customized to access the Web in efficient ways. These will also become vastly popular soon since most software applications are now moving into the cloud. But that is another post for another day… The important point to note is that these devices will compete with the traditional laptops many of us won’t get more than 40 feet from now, and Google wants to own the operating system that drives them.

Why? Why get into operating systems and browsers when they are making tons of money in search and advertising? Since I do not have access to the internal thinking at the Googleplex, I will have to just use my left brain skills to divine the possibilities, so here is a list:

1 – Google is the king of Web based free (or low cost) software that is advertiser driven. The better a netbook runs, the better their products will perform, the better they perform, the more people that will use them, the more people that use them, the more money Google makes on clickthrough.

2 – They enjoy competing with Microsoft. Bill Gates once stated, when addressing monopoly charges, that one day soon, a competitor could develop products that would change the game, and compete mightily with MS. I am not sure he really believed that, but he does now. Google has the brain power and brand name to compete with MS and they are now attacking two of the most powerful revenue drivers at MS – Office, and now Windows.

3 – Google believes that the browser and the operating system can become one piece of software, and the world would be a better place. Well, better if they are the ones that put it on the streets – hence the common moniker on their applications.

4 – There is a hole in the market for a lightweight netbook operating system. Windows is too big for this job, and Apple may be too distracted with the iPhone success to have time to configure the MacOS into a netbook play. Even if Apple comes out with a killer netbook and their own OS, there will still be room for a competitor for those that do not swing to the Apple paradigm.

5 – Search is a great way to make money, and Google owns a 60% market share. Where else is there to go but to a different platform to sell advertising? Might as well take all that search money and broaden the revenue base. Hey, it worked like a charm for Apple; they went from a PC company to an mp3 player and cell phone company almost overnight.

As you often mention to me, so what? Well, let’s postulate why this might be interesting for you and me… There are actually more operating systems than just Windows and the MacOS if you count a couple more on handheld devices. And in every case, they do not really integrate with the browser well. This is a problem because all of us are starting to use the browser, or at least Internet enabled applications, more than we are using installed applications. So the ability to run fast, solid, and with cool features over the Web is getting to be a big deal. What Google will likely do now is force MS and others to create new hybrid versions of operating systems that are custom made to work well with the Internet, and also tuned to the device they are running on. This will be great for consumers. Even better because Google typically works to drive prices down and leverage their powerful advertising supported model.

This is the American free enterprise, competitive economy at work and I love it. Without a Google challenging MS, we would have much less innovation. Without Apple challenging Palm, Motorola, and Ericson, we would not see such advances in handsets. I give Google credit once again, for stepping into a market where competitors already exist and pushing for innovation at a low cost. I hope their Chrome operating system is awesome, and it gives engineers at other companies fits. Then I hope someone combines a netbook with the Kindle so I can just carry one lightweight device with 24hours battery time and still get my work done. Device consolidation… It is coming, and I wish it would hurry up because I need a new laptop!

Scott Klososky
Scott@klososky.com