Mere hours ago, Google did something that's pretty surprising, and that will impact the netbook, and maybe PC market: It announced its own operating system, Chrome. It's open source.

Google announced the news on its blog, setting a clear agenda for all to see. "The operating systems that browsers run on were designed in an era where there was no web," it said in the post, noting that Google Chrome OS--which will be based on the pretty successful Chrome browser--will be Google's "attempt to re-think what operating systems should be."

That sounds bold, but Google has a lot of brain power available to make it true. The OS will be open source, lightweight and have "speed, simplicity and security" at its core. The lightweight and simple aspects are clear from the fact that the OS is going to be initially targeted at netbooks--it's absolutely a separate project from Android, (which we guess puts to rest to some of those Android on netbooks rumors). And if you think XP and Windows 7, along with proprietary Linux installs, have too much of a stranglehold on that market, think again. Because Google's also said its in talks with OEMs and that you can expect netbooks bearing the Google OS from the second half of 2010.

As if that's not enough, the way Google appears to be re-thinking an OS is completely new. Chrome OS is designed to be instant-on, with a minimal interface and most of the user experience will happen via web interactions. Chrome will run within a "new windowing system" superimposed on a Linux kernel, and the whole thing will work like it's in a browser. Consequently "all web-based applications will automatically work" so developers will supposedly be able to write software that runs on Chrome, and in browsers on Windows, OS X and Linux machines. Chrome is also going to work on both ARM and x86 architectures, meaning everything from smartphones to smartbooks to netbooks to full-on desktop PCs. Yup...Google admits its got its sights on running your home PC.

How will Chrome OS work? I'm betting that some of the key components will be cloud-based, which is implied by the instant-on aspects of the project. If Chrome is extremely lightweight, and merely a sophisticated portal onto a cloud-based OS, then when you flip on your PC it'll be up and running swiftly, and ready to access lots of data on a distant server which is already on, and already speedy. I'm prepared to be wrong about this, though--Google could have more surprising tricks up its sleeve.

Needless to say this is dramatic news, and its repercussions for the netbook and even full-on PC industry could be significant. After all, Android has been a great success for Google on smartphones. Can Google produce a quality OS that people will enjoy using? A very positive sign in support of this is that Google appears to be ready to accept community input in the design of Chrome: "We're definitely going to need a lot of help from the open source community to accomplish this vision." Let's just hope that this designed-by-committee approach results in a racehorse, and not a camel.

The final question, of course, is "Should Microsoft be worried?" And the answer is probably not, assuming Windows 7 is a significant improvement on Vista. It's due this year, so will have a whole year's start on Chrome OS, during which it will seep into the public's consciousness, and no doubt be installed on billions of computers. Breaking into that market is going to be hard, as the average consumer tends to think of Windows first, and sometimes Macs second--a Google PC will sound somewhat alien. Similarly, it'll be difficult for Google to tackle what you could call the serious PC market, as its OS will be a complete unknown. But the battle is on.