The biggest early buzz of CES 2006 might be the rumor that Google plans to announce its own operating system / PC / Internet appliance (allegedly powered by Linux and Firefox). This is a development that was rumored at various times throughout 2005, but earlier this week the LA Times published a story that stated not only would Google announce a new low-cost PC device at CES, but that the search giant had already negotiated a deal with Wal-Mart and other retailers to sell it.
However, both Google and Wal-Mart have categorically denied the rumor this week. Typically, if a rumor like this were true, the parties involved would issue a "no comment," especially this close to the suspected unveiling.
Some analysts have wondered why Google would want to enter the low-margin PC business, which would potentially provide them with a lot of new headaches involving supply chains and manufacturers and other mundune business minutae. After all, Google has gained its strength by its intellectual innovation — not its expertise in business processes.
Nevertheless, I think the answer to "why" Google would want to enter the PC or OS business is a simple one — mindshare. Right now, the overwhelming majority of Google users come through Microsoft Windows and that means that Microsoft ultimately controls the platform in which Google wants to run all of its future services (which will go far beyond Web pages and search engines). If Google can offer an appealing little device for Web surfing and e-mail, then it could offer a disruptive competing platform. In other words, I don't think Google would get into the PC business to make money off the devices themselves. It would do it to build a foundation for future developments and undermine the hegemony of Windows.
One thing is clear — if Google does enter the PC/OS business, it will show that it has the brass cojones to stand toe-to-toe with Microsoft and take a shot at the Redmond giant's most sacred safe haven. Since the debut of MS-DOS, no company has ever done that and been able to gain and sustain a significant portion of the desktop market. And yet, Google's brand recognition and Internet savvy would make it an intriguing challenger.
Jason Hiner has nothing to disclose. He doesn't hold investments in the technology companies he covers.
Jason Hiner is Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He's co-author of the book, Follow the Geeks.