I wrote a blog on Dec 2nd wondering what happened to Chrome OS. Lo and behold, on Dec 7th, Google held a special event (live feed from Sean Hollister of Engadget) where Chrome OS was revealed, along with details of a pre-production/production-level, limited-edition Chrome OS netbook, the Cr-48.

The mass market version of a Chrome OS system would ship only mid-2011 from Acer and Samsung.

The folks at “The Register” got their hands one of the units and came out with a review.

Chrome OS also has its detractors

Richard Stallman, founder of the Free Software Foundation, thinks that not having your own data on your own property is akin to losing your legal rights to your data. The example he gives is that in the US, the police require a search warrant to get access your property, but don’t necessarily need to when trying to get to your data on some one else’s property e.g. Google’s servers. In some ways, Stallman is right:  look at the amount of influence members of the US government has over corporations when it comes to WikiLeaks. This means that corporations running cloud services can block access to your own data if you offend the wrong people.

The creator of Gmail, Paul Buchheit, thinks that Chrome OS will be “killed next year” or “merged” with Android. In this case, I think Buchheit is basically channeling the confusion surrounding the positioning of Chrome OS with respect to Google’s other operating systems, Android. The announcement on Dec 7th and the delivery of the Cr-48 onto users’ hands have not dispelled that confusion.

Part of this comes from our mental association linking larger, physical devices with larger, more full-function software. In contrast, Google is targeting a full-function operating system (Android) at physically smaller, mobile devices while leaving Chrome OS, a browser-only-single-application operating system, to power physically larger and presumably more powerful devices like netbooks.

Perhaps we will get more clarity when the mass market Chrome OS devices are released next year. At the least, their price points will give an indication of how Google is positioning them.

In a previous article, I have postulated that perhaps the ideal device for Chrome OS will be a very low cost, full Internet experience tablet; basically, an iPad without the complexity of on-device applications and with support for Adobe Flash.

I still think that this is the ideal scenario. At the least, Google should created an embedded version of Chrome OS for use in devices like printers etc. For example, I just bought an HP D110a printer. This printer represents a whole new generation of smart, Internet-savvy devices that can connect to the Internet and even download firmware upgrades for themselves. One key promise of the D110a is that you can access “applications” on the Internet and print content without using a computer. The promise fails on the D110a because it has a tiny screen, resulting in a very poor user interface. With a more complex operating system like Chrome OS integrated with the D110a, the user will have a more complete Internet experience, and hence a higher tendency to print content directly from the printer (which obviously would drive the sale of printer cartridges…). HP has said that they will be leveraging webOS for this end in the future. I think Google should also explore that possibility.

Finally, Brad Pitt-lookalike and founder and CEO of Mashable, Pete Cashmore, is confused about the Chrome app store. An app store of websites is not a new concept. When Splashtop 2.0 was launched earlier this year and shipped with Lenovo on their netbooks, one feature was an app catalog that contained a list of popular websites. Users used this to customize their Splashtop experience by making their favorite websites more easily available on the operating system launchbar.

What is new with the Chrome app store is the availability of web sites that have integrated with the various Google APIs. Some of the web pages of these web sites are then still available even when the Chrome OS device is offline i.e. not connected to the Internet.

This, in my opinion, is a very important factor for the success of Chrome OS, if Google continues targeting it as the sole operating system on devices like netbooks and notebooks. Without an offline capability, Chrome OS devices will have zero value (other than as paperweight) in markets where Internet access is either intermittent or costly. This applies to most of the third world and much of the developed world.

In the mean time, some folks have installed Ubuntu 10.10 on a Cr-48 and you can see the video with the link below

Ubuntu on the Cr-48.

Disclaimer: I used to work at Splashtop Inc (formerly DeviceVM, Inc), which developed the Splashtop product.

It was widely reported (or rumored) back in August (see my “Much ado about Chrome OS” blog) that Google would be shipping a Chrome OS notebook or tablet by Black Friday (aka November 26th 2010).

Well, that day has come and gone and there’s still no sign of Chrome OS shipping.

It looks like, based on this report by Engadget, that Chrome OS systems will be generally available in 2011, but that units will be available  this year for internal use à la Nexus One.

My earlier blog also suggested that perhaps Chrome OS would be positioned as a tablet OS for low cost, always-connected Internet devices whereas a richer OS like Android would make more sense for feature-rich devices. However, Eric Schmidt, at Web 2.0, made it clear that Chrome OS would be for devices with keyboards while Android would primarily be for touch (tell that to my T-Mobile G2).

Unfortunately, that clarification still doesn’t tell me why one would buy a Chrome OS device over an Android one. Google has some work to do to differentiate and position its two operating systems.

In the mean time, Jolicloud has beaten Google to the punch by launching the Jolibook, a netbook running the Jolicloud OS (based on Ubuntu). It is currently available only in the UK.

I have tried out Jolicloud version 1.0 and find it easy to use, but nothing spectacular. It has a very good integration with cloud storage services like Dropbox and Zumodrive. This allows you to share data between the Jolibook and your regular PC, making the former a great companion device.

Jolibook also includes a number of social features including a tie-in with Facebook log-in and its own social network that allows you to find out what other Jolicloud users are doing e.g. which are the popular applications etc. This secondary social network creates some level of stickiness: when you have invested some time/effort into setting this up, you will be less likely to switch to another environment.

My former employer, DeviceVM (now called Splashtop Inc), has also jumped into the fray, but in the reverse direction: whereas you are able to buy notebooks from HP, Dell, Sony and others, with Splashtop already installed, you were previously not able to download a version of Splashtop and install it on a system that you already have. To remedy that, Splashtop OS is now available for download, in beta form, from the Splashtop Inc website. In a “one up” to Google, Splashtop comes with Bing (thanks to moi) as the default Internet search engine.

At the end of the day, the big question is how these non-Windows operating systems will change the way we use computers or the Internet. With Splashtop, DeviceVM was successful in changing boot time expectations: Windows 7 boots much faster than Vista, Steve Jobs proudly proclaimed that the new MacBook Airs had this new feature called “Instant-On”, and there is a bunch of new technology (described here) to allow super fast “boot” with Linux. DeviceVM was also the first to realize that users really want to use the Internet most of the time and had a product to cater to that expectation.

The next step will be a change in user behavior aided by all this new technology and the increasingly social nature of the Internet. 2011 is definitely going to be an interesting year.

The Register had an article about how Microsoft is trying to hold back the open source tide by levying royalty payments on Acer and Asustek for their use of Android.

The article also talks about how Microsoft is failing to come out with a business model to compete against open source projects/products like Android.

I think though, that the question is not really one of open source versus proprietary or closed source.

The real Microsoft vs Android question is what is today’s new business model?

Is it one whether the software product itself is the end to itself? Or whether it is a means to an end? Whether or not the product uses open source is irrelevant.

For traditional Microsoft products (Windows, Office etc), the software is the end. Microsoft gets its revenue at the point of purchase of the software.

For Android, the software is the means to the end. Google does not get meaningful revenue when you buy an Android device. Rather, Google gets its cut when you use the device.

This difference reflects the economics of the new millenium: the product itself is no longer the major part of the business model. It is only a means to executing on the business model.

With the old approach, the consumer lifetime value is limited. Once the product is sold, there is no additional revenue. That is why companies like Microsoft come up with frequent and sometimes useless version upgrades: to get additional revenue from existing users. A subscription model is a variation of this.

With the new approach, the consumer lifetime value is practically limitless. As long as the consumer is using the product, she is generating revenue for the company. Since the product is basically “free”, there is almost no barrier to user upgrades and continued usage.

As a product manager, this new approach presents its challenges. You can no longer just focus on the product itself. The latter is now part of a larger ecosystem: the business/revenue model. This will mean integration with other services and products.

On one hand, you have to make sure that your product is usable, that consumers want to use it. On the other hand, you also have to make sure that the product is sufficiently well integrated with your company’s monetization products and that the users will use your product in such a way that they will generate meaningful revenue.

The upside is that the revenue potential is enormous. Just look at Google.

The blogo-/twitter-sphere was briefly alit last week when this article came out on TechCrunch.

I think the simplest explanation is probably the correct one in this case: Google is working on a 3G/Broadband connection manager for Chrome OS and they working with Verizon to validate it on the Verizon network.

The bigger question though, in my mind, is what kind of device will Chrome OS appear on?

Android, Google’s “other” OS, is coming along strong and is poised to overtake Apple’s iOS in terms of shipment volume. Android is no longer limited to smartphones. It will be shipping on everything from music/media players to tablets from Samsung and Motorola.

How will Chrome OS fit in this picture?

One possibility is that Chrome OS will ship on regular PCs as a companion OS to Windows. A well known example of such an approach (and I would say the “pioneer” in this space) is DeviceVM’s Splashtop. This alternate OS environment ships on notebooks from HP, Lenovo, Dell etc and allows the user to get onto the Internet within seconds of powering up his PC, without having to boot up Windows.

However, this approach is not game changing. DeviceVM is already shipping such a solution.

What is will be game changing however, is to leverage the lightweight nature of Chrome OS and ship it on inexpensive hardware. Conceivably, we would be talking about sub-$200 netbooks/tablets with Chrome OS as the sole operating system. An old blog article from ARM.com alludes to this approach.

In other words, Chrome OS will not be Android’s “big brother”, but it will be the lightweight, single-purpose younger brother. If you want an all-in-one multi-purpose mobile device, get one with Android. If you want an inexpensive bring-you-to-the Internet device with a great web browsing experience, get one with Chrome OS.

This makes sense in a way. The Android web browser today, for example, is really quite limited. Firstly, by the small screen size and low screen resolution of the devices it appears on. Secondly, popular Chrome browser features like bookmarks sync, extensions are not (yet) available for it.

A somewhat single-purpose device still makes sense if they are low-cost enough. We have seen that Amazon’s Kindle continues to sell strongly in spite of the iPad.

What is Verizon’s role in this scenario?

Verizon has been selling 3G/broadband-capable notebooks and netbooks. A natural extension to this product portfolio will be an Internet tablet.

The business model can also get interesting here. For example, the consumer gets a Chrome OS tablet for free when she signs up for a 2-year data plan. Google and Verizon monetize from both the subscription and ad revenue that result from the use of Google services and web properties.

Update (11am PDT): Just saw this on Engadget: Chrome OS tablet coming from Google and Verizon on Black Friday?

Update (5pm PDT): Looks like the Engadget article is all speculation. The link above has been updated. The source of this speculation, Lee Matthews, probably read someone’s blog about Chrome OS (ahem…cough) and added more sauce to the mix…

Disclaimer: I am a Senior Director, Program Management at DevicevM. I wrote this article to express my personal views.

There are reports of Microsoft offering to buy Yahoo’s search business.

My take on it?

Yahoo should sell.

Although it’s too early to declare that Internet search is being commoditized, Google’s lead as the preferred search engine means that anyone else trying to compete in that space is just wasting time.

Think of it, in order for Yahoo to continue to compete with Google as a search engine, it needs to invest in continually improving the search technology. Then there’s all the storage and infrastructure costs etc. At the same time, Yahoo’s search monetization is much less than that of Google.

It is going to be difficult for Yahoo to give up search. After all, that company started off in that space. All that emotional attachment to the past and talk about “core business” will get in the way of cooler heads. I don’t know if Jerry Yang will have the clout, guts and objectivity to jettison the search business.

Yahoo has a bunch of other properties which, IMHO, have more value than the search engine: Flickr, Yahoo Groups, YIM, www.yahoo.com etc

Flickr, in particular, has a pretty good future. Almost all popular social networking sites allow you to import photos automatically from Flickr. This makes it the default choice for social networkers who have tons of photos to share. Adobe’s new Photoshop Express also links to Flickr, which I thought was very clever of Adobe. I have not tried out Flickr’s new video capabilities, but I think that Flickr has a lot of room for growth.

Likewise for Yahoo Groups. If you are looking for dedicated mailing lists for your running club or MBA classmates, you don’t have to look further than Yahoo Groups. I have used Google Groups and Yahoo is still much better.

So Yahoo should objectively identify properties that have real value to users and room for growth. It should then dedicate resources to building up these properties to make them the “default” destination for their respective categories. Yahoo should also find ways to link these properties together seamlessly so that end users don’t get the impression that they are dealing with very disparate websites. Google does a really bad job of this.

Monetization? Well, just go with Google.

Oh, and take that money from Microsoft for the search business.