Larry Ellison of Oracle was touting the benefits of the network computer back in 1996. He was ahead of his time. People weren’t ready for the network computer, and the network certainly wasn’t ready for the people.

Fast forward to 2009, when many people view computers as mere tools to connect to the Net. Typical uses for computers involve streaming media, social networking, managing photos and information consumption. When the typical home user uses a PC predominantly for communication and entertainment, the offline computer is nearly useless.

Chrome is also arriving just in time to take advantage of dirt-cheap hardware and super-broke consumers. The future for Chrome based netbooks is in the $200 and under space. At this price level, Microsoft would have to virtually give away Windows. Within a year or two, netbooks could hit the magical price of $99. For this price, people will happily purchase a computer that is nothing more than a simple and fast web-surfing device. While people might expect $300-plus computers to have full-featured OSs they may be less critical when netbooks fall into the impulse buy price range, especially when paired with lightning-fast performance.

Of course, this model doesn’t work very well for businesses, hard-core gamers, and media professionals. For these users, expect the full-featured OS to stick around, for now at least.

In a previous post, I argued that for Chrome to become the dominant operating system, it needs Windows compatibility. I’m not too proud to eat crow, and I maintain that businesses that rely on complex business tools and a legacy of homegrown apps will need Windows for a good number of years. However, if Chrome represents a compelling enough value proposition, these services can be handled by applications like Windows Terminal Services and Citrix.

Another driver for an OS like Chrome is youth. Netbooks appeal to a younger crowd for several reasons, not the least of which is price and portability. Younger people, already live on the web. The computer is merely a tool to get on Facebook and Twitter. The OS is inconsequential. They don’t care if it can run 10-year-old legacy apps. To them, the computer is like a television. Who cares if it’s a Sony or Magnavox, as long as it can get the channel you want.

Younger people also don’t have their brains polluted with 30 years of Microsoft legacy. A 14-year-old is better equipped to choose a system on face value rather than years of familiarity and comfort.

Chrome OS may be a victory for Linux, but probably not in the way that Linux proponents had hoped for. The problem with Linux is that it’s earned a reputation as the OS for geeks, which is a label that most people don’t identify with. Just the very mention Linux is intimidating. Google however is a name that provides comfort and familiarity. For many people, Google IS the Internet. They aren’t buying a netbook running Linux, they’re buying a netbook that runs Google.

If Google can find a large audience in the netbook category, application developers will focus more on Web apps that will work with Google Chrome. Developers code for the lowest common denominator, which for years has been Windows. If Google Chrome is successful, OS native apps will lose footing and Chrome could make a move for the desktop.

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