Google launches OS - calls out Microsoft

Internet giant challenges the software maker's main business with its new operating system.

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By Ben Rooney, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- Google Inc. is planning to hit Microsoft Corp. where it hurts by challenging the software giant's dominance in the world of computer operating systems.

The search firm said late Tuesday that it will begin offering its own operating system, called Chrome, in the second half of 2010.

While Google (GOOG, Fortune 500) already offers a host of products that compete with Microsoft (MSFT, Fortune 500), the new operating system is a direct challenge to Microsoft Windows, which is the most widely used operating system in the world.

"Google really can challenge Microsoft, because the proliferation of Web-based applications makes the operating system much less important," said Zeus Kerravala, analyst at Yankee Group. "As we pave the way towards real Web 2.0, there will be less of a real tie-in to Windows."

The new system will initially be targeted at netbooks, the company said. Netbooks are small, inexpensive laptop computers used mostly for Internet access.

Google said the new operating system will make use of open source programming, which allows third-party developers to design compatible add-ons. (Think of the applications created for the iPhone or Facebook.)

Many netbooks currently run a version of Linux, or Microsoft's old operating system, Windows XP. Microsoft has said its current Vista operating system is too big to run on the scaled-down laptops, but it said netbooks will be able to run its Windows 7 OS, set to debut in late October.

But Google thinks computers need a new operating system solution.

"We hear a lot from our users, and their message is clear: computers need to get better," Google said in a statement. Chrome is "our attempt to re-think what operating systems should be."

The new operating system comes after Google launched its Chrome Internet browser late last year.

-- CNNMoney.com staff writer David Goldman contributed to this report. To top of page

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