When I saw this come across my inbox a bit ago, I first thought this was a late-night prank being played on me. But as it turns out, it’s true: late this evening Google confirmed that they’re working on their own operating system for netbooks, tentatively titled Chrome OS.

Rather than rattle off the entire contents of their announcement, let’s hit the high points. Google's Chrome OS is an OS designed to do one thing and one thing only: run Google Chrome. It will be open source, it will run on ARM and x86, it’s Linux based, and it’s not going to launch until the second half of 2010. Taking a page out of Apple’s book, Google is announcing it now as a way to avoid another party spilling the beans before Google is ready.

The single most important thing to take from this announcement right now is just what Chrome OS will do. It won’t run an email client, it won’t run an office suite, and it won’t run games – it will only run Google Chrome. It’s Linux stripped to the bone, left with just enough to run Chrome, and nothing more.

Given this kind of a design, it should come as little surprise then that Chrome itself will be the platform through which additional applications will run. Google has been pushing the web application idea for years – indeed Chrome exists to further drive that goal – but previously this has always required accessing said web applications through a web browser running on a full-fledged OS. If nothing else it is somewhat redundant, not to mention the existence and use of native applications goes against Google’s grand unified vision for everything to be a web application.

Because Chrome will be available on Linux, Windows, and Mac OS X, developers will be able to create web applications targeting Chrome, and have it run on computers running any of the above operating systems, along with netbooks running Chrome OS. Along these lines, Google’s own web application suite finally left beta this week, where it’s entirely possible that this was intentional to coincide with the announcement of Chrome OS. Regardless, clearly Google’s application suite is going to be the center point of Chrome OS in order to flesh out the capabilities of Chrome OS-equipped netbooks to what’s expected of a modern computer.

The early announcement leaves plenty of time for more details to be refined and released, but this does raise a few core issues. First and foremost, will developers go with it? One of the most recent parallels to this is the original iPhone launch, where Apple pushed something very similar as the official way for developers to create applications for the iPhone, through creating web applications for Safari. It failed miserably, and a year later a real SDK was released for developers to create native applications. Chrome is better equipped than circa-2007 Safari for these matters (it has local storage capabilities, among other things) but the point still stands. Developers would be limited to AJAXy technologies, with no Adobe Flash to back them up. For the most part, developers would be looking at abilities below what Flash and Java are capable of, so not everyone would necessarily be happy about working with a limited toolkit.

The second issue is how consumers will respond. Chrome has been a tempered success as a browser, it’s bigger impact being to drive everyone else to improve their JavaScript performance. Just being Chrome won’t be enough for Chrome OS to succeed. Meanwhile Google’s web applications have been a smash hit – Gmail is the new standard for webmail interfaces, and other services like Google Docs have been picking up in usage. Google would be relying on their web applications to move consumers (and OEMs) to Chrome OS. But let’s also cut to the chase – this is the computer terminal/thin-client reborn, and history is littered with the carcasses of terminals and terminal-like computers that have died to full-fledged computers when consumers/users rejected going back to terminals. A complete thin-client system may be a gutsy move in modern times, but it's still a significant risk that is not in any way guaranteed to win over users.

And last but not least, we have Microsoft. The web browser replacing the OS has been Microsoft’s worst nightmare for well over a decade now. Much of their late-90’s anti-trust trial focused on how they attempted to drive Netscape out of business for fear of this exact situation arising. Microsoft won’t sit by idle, they will undoubtedly make a big move against Chrome OS, and they will try to not get dragged back in to court in the process. Whether that means just more cheap copies of Windows for netbooks or something more remains to be seen.

Quickly, it should also be noted that this is a separate effort from Google’s existing OS, Android. Android is similar in that it’s a Linux-based OS, but Android is targeted towards phones (even if it can be run on a netbook) and can run additional applications through Java. Chrome OS would be for more powerful devices, and as announced would not be able to run any applications other than AJAXy web applications through Chrome. Along these lines, it should be noted that Chrome OS is going to use a brand new windowing system. It's a bit of a generic statement, but we suspect that Google is going to keep the Linux standard of the X11 windowing system, but write their own window manager and GUI framework. If that is the case, then we won’t be seeing the usual suspects of KDE(Qt) or GNOME(GTK) here. This would also mean that even if Chrome OS could be manipulated in to running other programs, it would not have the ability to run the vast majority of Linux GUI applications without significant modification, as most applications use one of those two frameworks.

As always, we’ll have more on Chrome OS as it develops.