Google Set to Wage OS War With Microsoft

Google Inc.'s entry into the operating system business poses the strongest long-term threat in years to the dominance of Microsoft Corp.'s Windows software, according to analysts.

Google last week announced that it would launch its long-anticipated operating system, based on the open-source Linux kernel and built around its Chrome browser, sometime in the second half of 2010. The new Web-centric operating system will be dubbed Google Chrome OS.

Though analysts agreed that the Windows hegemony is safe in the short term, Google has the financial muscle, engineering might and industry clout to survive a long-term battle with an industry powerhouse like Microsoft.

"Google doesn't need an operating system to support its revenue stream," said Dan Olds, an analyst at Gabriel Consulting Group Inc. "They have lots and lots of revenue from their advertising bread and butter. That means they have [the] staying power that's critically important in this market."

Michael Silver, an analyst at Gartner Inc., said that Microsoft is unlikely to ignore the threat to Windows. "Microsoft, after all, is one of the more paranoid companies around," he said.

He added that Microsoft is unlikely to be adversely affected by Chrome OS in the short term.

Microsoft did not respond to a request for comment on the Google announcement.

Analysts did note that Google must stick to the long, complex grind of developing an operating system if it wants to be successful in that business.

Rebecca Wettemann, an analyst at Nucleus Research, said that in recent months, Google has shut down or stopped supporting several products, including Google Video, Google Notebook, the Jaiku microblogging service and the Dodgeball mobile social network.

"They pick something up, get excited about it and work on it until they find another shiny new object they want to play with," Wettemann said. "My feeling is that Google needs to stop announcing things and instead execute on completing them."

Nonetheless, the Chrome OS plan has attracted the support of several top PC vendors, including Hewlett-Packard, Lenovo Group, Acer and Asustek Computer.

Copyright © 2009 IDG Communications, Inc.

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