Google CEO hints Google/Linux netbooks may be coming

People have been speculating about Google getting into the desktop business ever since Good OS, an Ubuntu-based Linux built around online Google applications showed up in 2007. Then, the rumor-mill really got churning when it was shown that Google mobile operating system, Android, would work just fine as a desktop operating system. Just because something can be done, though, doesn't mean a company actually going to do it though. On March 3rd, though, Google CEO Eric Schmidt said, "What's particularly interesting about netbooks is the price point. Eventually, it will make sense for operators and so forth to subsidize the use of netbooks so they can make services revenue and advertising revenue on the consumption. That's another new model that's coming."

Making money from online advertising. Hmm... Now what company, with a name that starts with 'G' and ends with 'e,' do we know that's the absolute tip-top at making money from online advertising? Could it be Google!? I think so.

The idea of selling netbooks cheaply with a service contract is already being tried. Dell and AT&T offered a Dell Mini 9 for $99 with an AT&T Data Connect contract. I have no doubt you'll see similar mobile phone like discount netbook pricing from other PC companies and telecoms soon. Look for these offers to start showing up everywhere later this year or early next year, as high-speed WiMAX networking starts to come into its own.

It makes perfect business sense for Google to jump into this business. Netbooks continue to be the one bright spot in computer sales and Google already has a Linux that will work on them. Google, of course, also has many online applications that work perfectly on a netbook. Making it even more attractive, Google is making it possible to use their applications, such as GMail, without a Internet connection.

Now take all this, combine it with putting data and applications on the cloud and Google's online advertising savvy, and I see a business model that, even in this grim economy, can't help but make money.

We've gone from pure speculation, to speculation based on facts, and now Google's CEO is talking about how much sense this kind of idea makes. I hereby predict that we'll see the first netbooks with an official Google Linux desktop on them by the second half of this year. It will happen that quickly because Google won't want to give Microsoft a chance to regroup with Windows 7 from its Vista disaster.

In 2010, the big desktop operating system battle will be between Apple, on the high-end, Google and the other Linuxes on the netbook and other low-priced systems, and Windows getting squeezed in the middle. If I were a betting man, I'd put good money on it.