• by Laurie Sullivan  @lauriesullivan, July 8, 2009

Analysts and open source experts seem less than impressed with Google's plans to introduce a Linux-based operating system, announced late Tuesday. The company will base the OS on its Chrome Web browser, and plans to release the system's code to consumers in the second half of 2010.

Analysts see limited financial impact for Google from the announcement. "It does not appear that Google will directly charge for the use of Google Chrome, given the open-source nature," Sanford C. Bernstein Analyst Jeffrey Lindsay writes in a research note. "The primary economic benefit may come down the line from helping to expand the use of netbooks."

Broadpoint.AmTech Analyst Ben Schachter agrees. He estimates little to no impact on Google's revenue until at least 2011, as a result of the announcement. Any change in the economics from the Chrome OS would show up similar to those from Android. He explains in a research note that Google offers the operating system to the OEMs for free.

In the case of Android, various versions place some requirements on the OEM, depending on whether they want to install Google Search boxes, Gmail, Google Calendar and other apps on the machine.

Both Lindsay and Schachter believe the open source OS could increase the use of Google's Web services and applications, including Google Apps. Google's proposed OS directly hits Microsoft's dominance in Windows. Lindsay believes Microsoft could feel the financial impact as more computer makers or consumers opt to use an open source OS, rather than Microsoft's proprietary system.

Advocates like Robin Rowe applaud Google's efforts, but say an open source Linux-based OS for netbooks already exists in the market, and that the Mountain View, Calif. company's announcement Wednesday simply reflects a natural evolution of its efforts.

Google has already tried its hand at distributing an open source operating system -- gOS -- for PCs through Wal-Mart. "Rome wasn't built in a night," Rowe says. "But Linux-based OSs for netbooks are already out there." Last year, Rowe, chief technologist at MovieEditor.com and open source expert, purchased an Asus netbook that runs Puppy Linux, a smaller OS designed for "lighter" hardware.

Googlers Sundar Pichai, VP product management, and Linus Upson, engineering director, wrote on Google's official blog post that the operating system is a natural extension of the Google Chrome Web browser. The OS will run on both x86 as well as ARM chips. Google is working with multiple OEMs to bring several netbooks to market next year. The software architecture is simple -- Google Chrome runs within a new windowing system on top of a Linux kernel. Initially, the OS will support netbooks, but it will eventually power a range of computers, from compact portables to full-size desktop systems.

For Google Chrome OS developers, the Web becomes the platform for application development. All Web-based applications will automatically work, and new applications can be written using favorite Web technologies. The apps will run on Google Chrome OS, as well as any standards-based browser on Windows, Mac and Linux to give developers the largest user base of any platform.