Google Chrome OS: Beyond the hype

    Google's new OS could spell trouble for Microsoft, but will Chrome really shine?

    By Jessi Hempel

    It's highly unlikely that the operating system Google announced yesterday -- dubbed Google Chrome OS -- will rocket to the heights of its chief competitor, Microsoft, right away. But it doesn't really matter. In a world obsessed with all things Google, the new OS will certainly get its fair share of attention, and the frontal assault on Microsoft that it represents will serve at least as a great distraction to the tech behemoth.

    We only know a few details about Google's plans for the operating system, which won't actually launch until the fall of 2010. It will target netbooks initially and then expand to the larger PC market. It will combine the Google Chrome browser with a Linux kernel. Though there's some overlap with Android, the company's operating system for mobile devices, this system is intended for computers. And it will be fast, accessible, efficient, and -- though Google (GOOG, Fortune 500) hasn't said as much -- it's likely the operating system will be free.

    Google's announcement is riddled with subtle jabs at its Seattle rival, even going so far as calling the Chrome OS necessary because "the operating systems that browsers run on were designed in an era where there was no web."

    But there's a lot to suggest Google won't be able to pull this off. The company's only breakthrough success has come with the AdWords and AdSense products related to its core business -- search. While Google's launched plenty of products over the years, it's sometimes hard to tell immediately whether they're designed to dominate a field or entertain technologists.

    And many of those products have not risen to prominence. Google Apps just came out of beta this week, but it's hardly affected Microsoft Office's dominance in productivity. Google product search -- you may remember it as Froogle -- was a flop. Google Checkout hasn't overtaken PayPal, and Knol was far from a Wikipedia-killer. Does anyone even remember Orkut, an early contender for the market Facebook has captured? And the list goes on.

    Still, Google's announcement should worry Microsoft (MSFT, Fortune 500). It's the biggest threat yet to the tech giant's crown jewels, and it's more evidence of the growing agitation in the tech industry: Google joins a number of other large tech companies that have quietly begun work on their own operating systems. (Intel (INTC, Fortune 500), for example, recently announced Moblin, a Linux-based operating system for netbooks.)

    Microsoft has yet to publicly react to Google's announcement of the Chrome OS, which will debut at the same time as the much-anticipated new version of Microsoft's own operating system, Microsoft Windows 7, this fall. Early reviews of Windows 7 have been promising, but Microsoft faces a significant hurdle with the poor reception of its last offering, Vista. Now, it will also have to launch in the shadow of a new competitor that -- while it doesn't even exist yet -- has already begun to steal the show.