Rumors spread yesterday about how Google was going to make a “Chrome Operating System”. Of course there have been rumors of a Google OS for years now. In early 2006, Ars reported on Google’s denial that it was prepping an OS distribution of its own based on Ubuntu. More recently, the (relative) ease of porting Android to netbooks led to plenty of speculation that Google’s full computer OS, when it appeared, would be based on Android. It turns out that’s not the case… it’s NOT going to be Android (though Google won’t preclude third-party adopters from using Android).

Last night at 9:00pm Google’s official blog raised the flag indicating Google was getting into the OS race. So what is the OS? It’s being Google Chrome OS and the operating system will center on Google Chrome and be targeted for netbooks (initially). It will run on both x86 as well as ARM chips and we are working with multiple OEMs to bring a number of netbooks to market next year. While speculation was wild a few days ago about a Chrome OS, what wasn’t understood was how Chrome, a browser, could BE an OS…. a browser isn’t actually an operating system, what about hardware drivers, memory and processor management, and other red herrings. It turns out Google is cranking out a new windowing system on top of a Linux kernel – welp, that solves issues about drivers and such.

So what’s the intention here? Google intends that the web is the platform. All web-based applications will automatically work and new applications can be written using existing web technologies. And of course, these apps will run not only on Google Chrome OS, but on any standards-based browser on Windows, Mac and Linux thereby giving developers the largest user base of any platform. If you do a lot in the cloud now then as TechCrunch put it “Don’t worry about those desktop apps you think you need. Office? Meh. You’ve got Zoho and Google Apps. You won’t miss office. Chrome plus Gears plus Google Wave plus HTML 5 and web platforms like Flash and Silverlight all combine into a single wonderful computing device. The Internet Is Everything. All the OS has to do is boot the damn computer, get me to a browser as fast as possible and then stay the hell out of the way.”

The timing of this couldn’t be any more bitter sweet for Microsoft. Windows 7 RTM lands next week with the full release for October. I have to wonder if Google was trying to take a bit of wind out of Microsoft’s sails since on of the things touted was how well Windows 7 runs on netbooks. The Google Chrome OS will only become available for consumers in the second half of 2010 – not that far behind the release of Windows 7.

Does this spell the end of Microsoft Windows? I’d say don’t count them out yet. Chrome OS will be new and will essentially require cloud computing. Sure, for most things I could get by on that, and as the web gets faster, HTML 5 hits, etc we will be able to do more and more in the cloud. In addition to the Microsoft has been developing “Gazelle” as an alternative to Internet Explorer. The browser acts like a self-contained operating system (sounds like Chrome OS) and is designed to address the fact that browsers like IE and Chrome have not been built by design to handle multiple processes and web applications in a secure manner. The browser relies on a “browser kernel” (5,000 lines of C# code) that helps enforce security rules to prevent malicious access to the PC’s underlying operating system. Built by the Microsoft Research team, company officials have been dropping hints that they are ready to talk more about Gazelle recently – perhaps as the Worldwide Developers Conference.

Google’s official blog post on Google Chrome OS