Google's OS Model Borders on the Brilliant

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Includes: GOOG, MSFT
by: Seth Gilbert

Google’s (NASDAQ:GOOG) been accused of many things but having slight ambitions isn’t one of them.From the company’s stated mission, to its search efforts, from book search to Android, the company always aims high. Google’s latest plans stick with the formula.

Following an increasingly popular trend of pre-announcing potentially big news, the company announced Tuesday on the Google blog that their Chrome web browser will have a new cousin in 2010: Chrome the Operating System.

Unabashedly sighting in on Microsoft (NASDAQ:MSFT) and its next generation Windows incarnation, Google says people want to get their email in an instant, and they want computers to run as fast when they’re a year old as when they were first bought. They want more for less. More accessibility, more speed and less maintenance. Google thinks it can deliver that. “Computers need to get better,” Google says. “Speed, simplicity and security are the key aspects of Google Chrome OS.”

The platform, which is separate from Google’s Android mobile operating system project, will initially target netbooks and users who spend the majority of their time on the web. It will run on x86 and ARM systems. Its windowing system, which is built on top of a Linux kernel, will emphasize web based applications and “cloud” services. Like Android, Chrome OS will be an open-source environment that hopes to harness the power of crowds to advance and improve itself.

Google services flow metue chartIn many ways, the strategy seems as simple as the aspiration is grand. It’s a vision of a world pre-configured to run Google services, open to all but optimized to give the groups in mountain view a headstart. With a Google OS you wouldn’t need to surf to YouTube or Gmail. Maps needn’t be a choice between Google, Yahoo or Mapquest. With Chrome OS, Google can put its own services (and ad offerings) front and center; opt out instead of opt in. (click the graphic on right to enlarge)

With different operating systems (Android for Mobile and Chrome for Desktops/Tablets), Google is positioned to leverage a broad and integrated advertising platform for all points of contact to internet services.

From an incentive standpoint it might be a conceptual model that borders on brilliant. By giving value without asking for direct payment, Google gives corporate partners incentive to use the services. By increasing feature sets and availability, they stoke consumer demand. By making the platform open to developers who can work without paying license fees (which lowers costs for consumers too), Google harnesses the power of the crowd. And for Google, the more people that embrace the platform, the better Google’s position for capturing advertising revenue.

It almost doesn’t matter if Google finds large scale consumer adoption. So long as there is some uptake, with a browser, search dominance, a mobile platform, a desktop service, even white label video delivery tools, the company is everywhere. They become an almost unavoidable waypoint to all things internet (see graphic).

Few companies have the depth of resources and cash to take on a big loss leader or chase such a big dream (which is exactly what these kinds of large scale development projects are). Google has the tools. Using them effectively might make it a non-exclusive gatekeeper to services we can’t live without and an advertising venue spanning the entire digital globe.

You almost have to wonder if Microsoft and Yahoo (NASDAQ:YHOO) executives didn’t just add another "uh oh" to their back office concerns.

Google’s small ambitions? Anything but.

(Now all they have to do is build something that lives up to the hype.)