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Google's operating system escalates Microsoft duel

Google Inc. is hoping to gain greater control over how personal computers work by developing a free operating system that will attack Microsoft Corp.’s golden goose - its long-dominant Windows franchise.

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"It's going to be tough," Standard & Poor's equity analyst Scott Kessler said of Google's foray into PC operating systems. "The reality is that as the importance of a device or task increases, people have a much lower inclination to consider a change."

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Businesses will be especially reluctant to abandon Windows because, on average, about 70 percent of their applications are designed to run on that, said Gartner Inc. analyst Michael Silver.

"This is going to generate a lot of hype, but it will probably be three to five years before it has any noticeable impact on the market," Silver said.

Consumers are likely to be more tempted to experiment with the Chrome operating system because it probably will decrease netbook prices even further. Microsoft's operating system typically adds $50 to $100 to a computer's price, Silver said.

If the Chrome operating system gains market momentum, it could raise antitrust concerns, depending on how Google ties the software with its other products, including its dominant Internet search engine. Microsoft had faced such complaints in the U.S. and Europe in packaging Windows with its now-dominant Internet Explorer browser.

Chrome will run on the same x86 microprocessors that now power Windows and Apple Inc.'s Mac computers, as well as ARM chips used in smart phones.

Google has already introduced an operating system for smart phones and other mobile devices, called Android, that vies against various other systems, including ones made by Microsoft and Apple.

The Android system worked well enough to entice some computer makers to begin developing netbooks that will run on it. Acer Inc., the world's third-largest PC maker, said last month it would begin offering Android netbooks, saying it would cut costs and likely help computers start up more quickly.

Google, though, apparently believes a Chrome-based system will be better suited for netbooks.

The duel between Google and Microsoft has been steadily escalating in recent years as Google's dominance of the Internet's lucrative search market has given it the means to threaten Microsoft in ways that few other companies can.

Google already has rankled Microsoft by luring some of its top employees and developing an online package of computer programs that provide an alternative to Microsoft's top-selling word processing, spreadsheet and calendar applications.

Meanwhile, Microsoft has been trying to thwart Google by investing billions of dollars to improve its own Internet search and advertising systems - to little avail so far. In the past month or so, though, Microsoft has been winning positive reviews and picking up more users with its search upgrade, Bing.

Now Google is aiming for Microsoft's financial jugular with the Chrome operating system.

Microsoft has drawn much of its power - and profits - from the Windows operating system that has steered most personal computers for the past two decades.

Google's chief executive, Eric Schmidt, and its co-founders, Larry Page and Sergey Brin, have not concealed their disdain for Windows.

Schmidt maintains Microsoft sometimes unfairly rigs its operating system to limit consumer choices - something that Microsoft has consistently denied doing. Google fears Microsoft could limit access to its search engine and other products if Windows is set up to favor Microsoft products.

Schmidt and Brin are expected to discuss Google's new operating system this week when they appear at a media conference hosted by Allen & Co. at the Sun Valley resort in Idaho. They had not arrived at the conference Wednesday afternoon as other participants finished up their lunch and set out for a whitewater rafting trip.