Google's founders have wanted to create an operating system since the very beginning, chief executive Eric Schmidt has revealed.
Despite Schmidt's unwillingness to begin another battle on the operating system front after the "bruising browser wars", Google founders Larry Page and Sergey Brin forged ahead with Chrome.
The initial Chrome browser project persuaded Schmidt to change his mind and now Google hopes to have netbooks running the Chrome operating system by the second half of 2010.
Chrome OS is Linux-based and will provide users with a free, fast, secure and lightweight alternative to Microsoft's dominant Windows operating system.
Google's strategy is to shake up the market and enable more people to go online to boost its web services business, which brings in most of the firm's revenue through advertising.
Analysts say Chrome OS will attract the attention of consumers first, but it could find applications in businesses, particularly those with large numbers of staff who do not need processing-intensive IT applications.