Google CEO: New operating system changes the game

SUN VALLEY, Idaho -- Google Chief Executive Eric Schmidt can't wait for the Internet search leader's free operating system to debut next year.

But he admits his excitement is a relatively recent phenomenon, having spent his first six years as Google's CEO trying to convince company co-founders Larry Page and Sergey Brin that developing an operating system to compete against Microsoft's dominant Windows franchise would be a terrible idea.

Schmidt didn't think the timing was right and, worse, he didn't want Google to get into a potentially bruising battle with the world's largest software maker. His change of heart shows how far Google has come since Page and Brin started the Mountain View, Calif.-based company in a Silicon Valley garage nearly 11 years ago.

Schmidt now believes Google can withstand whatever counter punches Microsoft might throw as the company sets out to make computers cheaper to buy and more enjoyable to use with an operating system tied to Google's 9-month-old browser, Chrome.

"They are game changers," Schmidt during a 75-minute interview Thursday with a group of reporters at an exclusive media conference in the Idaho mountains.

The operating system, due out in the second half of 2010, threatens to chip away at Microsoft's market share in the low end of the PC market — the less expensive and less powerful laptops known as "netbooks" which are becoming increasingly popular among consumers primarily interested in surfing the Web.

Both Schmidt and Page, who accompanied the CEO during the interview, sought to downplay Google's showdown with Microsoft. It's also something Microsoft Chairman Bill Gates didn't want to discuss when he was approached at the same conference by The Associated Press earlier Thursday.

But Page couldn't resist taking some veiled shots at Windows. Without mentioning Windows, he suggested Microsoft's operating system is becoming archaic as people spend more and more of their computer time in a Web browser.