Can Google Become the New Microsoft?

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When Google (Nasdaq: GOOG  ) first introduced its Chrome browser, it only looked like an operating system. Soon, it'll actually be one.

"Google Chrome OS is an open source, lightweight operating system that will initially be targeted at netbooks," Vice President of Product Management Sundar Pichai and Engineering Director Linus Upson wrote in a blog post from last night. "Later this year we will open-source its code, and netbooks running Google Chrome OS will be available for consumers in the second half of 2010."

From whom, we don't yet know. The Big G says only that Chrome OS will be made to work with both x86 and ARM processors. Intel (Nasdaq: INTC  ) , Advanced Micro Devices (NYSE: AMD  ) , and ARM Holdings (Nasdaq: ARMH  ) are among those likely to benefit.

Dell (Nasdaq: DELL  ) and Hewlett-Packard (Nasdaq: HPQ  ) have a tougher decision to make. Offering Ubuntu Linux as an option for your netbook customers is one thing. Selling a Gbook is another. There's no way Microsoft (Nasdaq: MSFT  ) can be pleased about this, especially given emerging evidence that Windows is struggling to compete as a netbook OS.

Many observers foresaw Google's interest in entering the netbook market, including yours truly. Yet one thing about this announcement surprised me: Chrome OS and Google's Android smartphone operating system will remain distinct.

What's not surprising is that Chrome OS will be a beginning, rather than an end. "We hear a lot from our users and their message is clear -- computers need to get better," Pichai and Upson wrote. Notice the language. Google thinks "computers," not "netbooks," need to improve.

Google wants Chrome OS to be a comprehensive operating system, a gateway to cloud computing -- and a way to replace Windows.

We've got two monopolies here, engaged in a global conflict that stretches from productivity software to browsers to search engines, and now to operating systems. The stakes don't come any bigger. I've already bet on Google for my personal portfolio. I've also recommended that our Motley Fool Rule Breakers subscribers buy shares. Others, like my peers over at Motley Fool Inside Value, like Microsoft's price and position.

With whom do you side? Cast your vote, and then share your rationale with us in the comments box below.

Apple is a Stock Advisor selection. Microsoft, Intel, and Dell are Inside Value picks. Google is a Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy salutes you.

Read/Post Comments (16) | Recommend This Article (13)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 08, 2009, at 10:57 AM, chopchop0 wrote:

    Is google going to provide the same level of software and hardware support as Microsoft? Windows has a long track record with IT departments for years now

  • Report this Comment On July 08, 2009, at 11:11 AM, DanDzombakCAPS wrote:

    Hopefully it's Google's OS is designed better than Windows so there won't need to be as much support needed.

  • Report this Comment On July 08, 2009, at 11:54 AM, Melaschasm wrote:

    If chrome will run software designed for windows, it has a real chance at being a game changer. If it doesn't, it is going to face the same problems as linux and apple.

    The reason I still have windows as a boot option on my computer is because I can not afford to replace all of my software, and in some cases there is not an alternative available.

  • Report this Comment On July 08, 2009, at 11:54 AM, ChannelDunlap wrote:

    Short answer: No

    Long Answer: I currently have something like 30 random applications installed on my computer. And this is on Windows 7, the latest, greatest, glitchiest version out there. With Windows I can more or less do everything I want to do on my computer, fairly easily. Until people change their programming ways and start writing 3, 4, 5 version of EVERY application (not likely), Windows will always have the advantage.

  • Report this Comment On July 08, 2009, at 12:00 PM, Matt015 wrote:

    Microsoft is starting to pull its online strategies together. The Windows Live ID platform needs to be adapted, maybe integrated into the Xbox Live platform, from there Microsoft could build web app platform to rival Google Applications. Microsoft has been slow so far but I believe they are starting to move faster. If they respond quickly and with a great product platform, Microsoft will have nothing to worry about in the OS department. Can they? We shall see.

  • Report this Comment On July 08, 2009, at 12:01 PM, kpinvest wrote:

    Google is a search company. They have as much of a chance of success as if they go after the smartphone market. Android vs. iPhone? Sorry Google, just another very bad idea.

  • Report this Comment On July 08, 2009, at 12:13 PM, dargus wrote:

    chopchop0, Microsoft support isn't as great as you think. Most of the support comes from your IT department, not Microsoft. It costs $99 just to send an e-mail to Microsoft. IT guys can easily be trained to support a Chrome system. In fact, Chrome will probably be easier to support since it will most likely be predicated on a cloud computing paradigm.

    To the creator of the poll and the naysayers, Chrome is a different animal than Windows. While there is no doubt some competition between Windows and Chrome, Chrome will most likely be creating a new market niche. A thin OS based around cloud computing. It is risky attempting to create a new way of doing things, but I suspect there is enough room in the market for all the players. Each offering has its own advantages/disadvantages and will appeal to different segments of the market. Will people buy into a cloud OS? I can't say for sure, but if Google creates an efficient, stable, usable product they may grab some market share. However, their target market maybe similar to the WebTV market which didn't work out well for Microsoft. It is going to be mainly people who need to do basic computing like E-mail or office applications. Gamers and power users will probably not jump on the bandwagon.

  • Report this Comment On July 08, 2009, at 1:06 PM, TMFDarwood11 wrote:

    The Chrome OS will be based on Linux. It remains to be seen how supportable it is.

    I say, this will be a useful alternative for a PC that is used primarily on the Web.

    For business use, Microsoft will continue to dominate.

    Personally, I can see the day when I will have two PCs. One a Microsoft OS based version used for all of my productivity apps and the second a Linux based PC (Apple uses Unix core). That will be my web and email PC and I won't care if it becomes infected or if the Chinese or whomever disrupts the WWW.

  • Report this Comment On July 08, 2009, at 1:21 PM, TMFBent wrote:

    Umm, Linux on netbooks anyone? It already had a big installed base, a major development community, and MSFT came out of nowhere to take most of the netbook OS market -- with crummy old windows XP.

    Simple reason: people want to run more than just web on their netbooks. They want to run some of their other familiar products, and for most, that means windows software.

    Google's OS will make a tiny dent, if that.

  • Report this Comment On July 08, 2009, at 1:21 PM, pjmaroun wrote:

    Google Chrome is too late.. Windows 7 will hit this audience, hit it shortly, and hit it in a big way. Windows 7 is really nicely targeted at NetBooks usage and can obviously do a lot more.

  • Report this Comment On July 08, 2009, at 1:23 PM, sanju007 wrote:

    you can't challenge Microsoft with something that has been around for years (Linux based OS), you don't just need to put the OS out there, you need to convert user from something they rely on and feel comfortable using.

    I think Google is just mad that shows different and interesting photos everyday while all they can come up with is different ways of writing GOOGLE.... this is very silly for a search giant

    by the way... I am using Fedora 11 right now but also have a computer with windows xp.... i found out that i can never get rid of it

  • Report this Comment On July 08, 2009, at 3:55 PM, ByrneShill wrote:

    Anyone who has actually participated in writing an operating system knows the amount of work required to do that, and knows that even google's billions-dollars R&D budget are just not enough. The ressources required to make an OS that could compete with windows are almost out of this world.

    Google has 2 choices for chrome: either go with another flavor of BSD (like ubuntu, FreeBSD, Mac OS, Fedora and every other flavor of linux does) or start from scratch. If they just make a new flavor of linux... YAWN! If they start from scratch, they'll soon find out that it takes years and years to write all that damn code. Even with, say, 10 000 engineers, it would take years. Unless they decide to cut corners and make a sub-par product. Then only MS-bashers will use their product.

    Blah, people can talk as much as they want, but until you've actually been in the buisness you're just making noise.

  • Report this Comment On July 08, 2009, at 5:15 PM, irelandsown wrote:

    Mr. Beyers – I would like you to askThe Fool’s CTO the following - “How soon will TMF be moving over to a Chrome based OS environment?”. There’s your answer to the headline.

    Including the most innovative and forward thinking companies, I don’t see corporate America taking the risk of moving their entire computer OS platform away from MS. As a result, one of MS’s core revenue streams stays put. Google innovates; MS catches up and wins the future business because they are the incumbent. The only threat in this space for MS is that Google might start to peel off individuals, startups, small companies and associations as customers. This won’t make a big enough dent to threaten (one of) the largest tech infrastructure behemoths and their position as the beneficiary of the Corporate 500 billions.

    I do concur that we're witnessing the early battles of what will play out as a long war. These guys are fighting against each other at every level; search, ads, browsers, OS, mobile OS. I’ve even heard that Google holds career fairs that require current MS employment to gain an invite! Consumer perception is critical in this war, and right now Google is perceived as a fast moving and innovative Company that quickly rolls out game changing products. I think this positive perception is more then fully accounted for in their current value which could take a hit if Chrome doesn’t takeoff.

  • Report this Comment On July 08, 2009, at 5:53 PM, CoolTouch wrote:

    I'm old enough to remember the OS wars of the mid 90s. In fact, I participated in them, running a multi-node BBS (remember those?) on an OS/2-only box. OS/2 was a vastly superior operating system to Win95, even Win98, but it ultimately didn't matter. IBM caved, and MS extended its monopoly and hegemony. Because of all this, I've been a very reluctant Windows user, and still run it under protest. I welcome anything that would break the MS monopoly because I think that ultimately the consumer will benefit.

    Linux survived the OS wars, mostly by keeping a low profile and maintaining the perception of being a geek OS. Ubuntu is slowly changing this, and if Google gets involved, the perception will change it even more. Meanwhile, Linux steadily improves, largely because it is open-source, and steadily gains ground. I was unaware that XP has pushed Linux aside in the Netbook arena, but it doesn't surprise me, considering MS's tactics. Maybe it will take the likes of Google, with the clout of Google, to turn this behavior around.

    About Chrome: really, it appears to me that this announcement is about what amounts to just another Linux distribution, albeit from a Really Big-time Player this time. And that could make all the difference in terms of perception, and hopefully ease of use, for future users.

    I don't think corporate IT departments will have anything to worry about if Chrome takes off. Except perhaps job security.

  • Report this Comment On July 11, 2009, at 2:05 AM, tmd8681 wrote:

    My belief lies in two thoughts. First, Microsoft is coming to an impasse. Two OS that were not perceived all that well. With 7 on the way, Microsoft is playing the high card. I have this strange feeling that Microsoft is done. If it does not want to be done, it needs to reinvent itself as a company.

    Google is Google! A company that has revolutionized many tasks that one can do on the internet through its Chrome browser. I strongly believe, not just because I am a user of the browser, that Google has vastly improved itself through this introduction. Furthermore, it expanded into the cell phone market. Think about it, a cell phone is nothing more than a small portable, handheld, computer. Google is correct, computers need to improve and they will!

    I love Apple products! I think they are made with care, love, inspiration, and the desire to maximize computing needs. The damn problem is the cost of such fortitude. Apple will always be a name for itself, yet it will continue to be used by the minority because of such cost.

    Linux is free!!! Why does it really need to compete?

    I look forward to seeing what Google has to offer!!!

  • Report this Comment On July 29, 2009, at 11:20 AM, maysjoe wrote:

    Can Google compete with Microsoft in the OS market? My guess is if Google is content to leave out all the "hooks" in the software that have made MS Windows such a target for hackers, they will win going away. Why do I say this? Simple, for years I have put up with unresponsive software failures that required a Operating System Re-boot (and a lot of wasted effort) but this past two years have been much worse. Out of frustration I tried Chrome. I can't believe the improvement! Fantastic! A problem is rare now and I am quick to tell anyone how pleased I am.


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