Google Inc.'s plan to launch its own computer operating system is a direct assault at the heart of Microsoft Corp., and its bold move could fundamentally change the way personal computers are used.
Under Google's new operating system, dubbed Chrome OS, people would play games, store photos and work on spreadsheets free of charge via the Internet, reducing the need for powerful software and massive hard drives on their personal computers.
"If Google can make it faster, cheaper and easier for you to get on the Internet, they end up with more eyeballs, more fingertips and more activity," said Richard Doherty, an analyst with the Envisioneering Group, a technology consulting firm in Seaford, N.Y.
Although Google seized the spotlight with its announcement of the new operating system late Tuesday, it's a sure bet that Microsoft will fight back.
"The company is stuffed with cash, has a massive labor force and an entrenched operating system in almost every PC in the world," said Laura Martin, an analyst with Soleil Securities. Microsoft's operating systems, the brains that runs computers, are in more than 90% of the world's PCs.
Instead of selling software like Microsoft, Google would make its money by selling advertising -- as it does now through its powerful search engine. More than 65% of searches on the Internet go through Google's search engine, compared with 20% for Yahoo and 8% for Microsoft.
Over the years, the Mountain View, Calif., technology company has tried to chip away at Microsoft's market share. Its Google Docs application is a direct competitor to Microsoft's Office. Google's Gmail tries to go head-to-head with Microsoft's Outlook e-mail manager. And Google's Chrome Web browser takes on Microsoft's Internet Explorer.
Google's operating system would tie many of its products together into one neat package, said Michael Lawson, senior associate dean of the Boston University School of Management and professor of information systems.
"This would make Google a more important platform," Lawson said. "The operating system has been one of the components in Google's architecture that was missing."
But Microsoft has some initiatives of its own. One of those is Bing, its new Internet search engine that takes aim at Google's core business.
