Google hosted something of a formal “status update” on Chrome the operating system in Mountain View on Thursday. There we discovered the company is open-sourcing the code. We also found out it’s intended as a netbook OS (for now) and that Google is working with several hardware partners to create a better netbook experience (full-sized keyboard, slightly larger screen). We also learned it’s intended to be a secondary or supplemental machine, not a primary computer.

That positioning is very important.

Google Product VP Sundar Pichai wouldn’t discuss the hardware partners involved with Chrome OS during that meeting but an earlier blog post indicates many of the usual suspects are already involved: “Acer, Adobe, ASUS, Freescale, Hewlett-Packard, Lenovo, Qualcomm, Texas Instruments, and Toshiba.”

Since Thursday there’s been a steady debate on whether Chrome will succeed or fail. Much of the discussion in the room on Thursday was fairly technical: about the “stack,” the Linux kernel, security, chips, code and so on. But I want to step back from the “specs” arena and look at the Chrome/Google netbook from a consumer perspective — because that’s where it will live or die.

Several years ago people were inhibited (me included) against buying Macs because of the dominance of Windows and related Microsoft software. The general concern went to being an outsider or incompatible, literally and figuratively, with the larger network of Windows machines out there. Several things have changed all that today — the rise of the internet among them — and Microsoft no longer has that same kind of psychological “lock” on computer purchase behavior among consumers. In fact its stepped up ad campaigns against Macs and the opening of physical retail stores both reflect that.

With Chrome netbooks, Google is entering the market at a time when people are increasingly open to buying non-Windows PCs. Mac sales obviously reflect that. By contrast, Linux and various Linux derivative operating systems (i.e., Ubuntu) have never established credibility with consumers, which is why they’ve been unable able to establish a commercial foothold. As Microsoft began to defensively focus on these cheaper, smaller computers consumers equally embraced Windows netbooks because of the familiarity of the Windows brand. Windows is now the dominant OS on netbooks accordingly.

Now with Google and Chrome there is likely to be a credible alternative to Windows-based netbooks. Putting aside the rumored tablet, Apple says it can’t build a low-cost computer that will uphold its quality standards. Google apparently said on Thursday (according to later hearsay I received) that if netbook makers want to use the Google brand — as in “with Google” on Android handsets — there will be some license fee involved. However, I’ve yet to see this confirmed anywhere.

I see Chrome (the OS) and Android as quite analogous in many respects. In fact, Google’s co-founder Sergey Brin also said that Chrome and Android will likely merge or converge at some unspecified future point. (There are a number of device makers that are putting Android on tablets and netbooks.)

The Google association or explicit Google branding will be relatively important in my mind to establish the credibility of this non-Windows, non-Mac machine with consumers. A “Google PC” or “internetbook” with the Google brand attached will attract consumers, especially students and younger users. In addition, the presentation of this as a second computer will relieve some of the pressure on Chrome to do everything a Mac or Windows box can. People will judge and consider it in a different way. Accordingly it also probably won’t be very important that there’s no (Microsoft) software on the device. (iTunes might be an issue, however.)

This brings us to arguably the most important consideration of all: price.

While Macs have been able to survive as a “premium” hardware line, the rest of the PC universe is ruled by price competition. That’s especially true among netbooks. Netbooks have been the best-selling segment of the PC market during the recession — because they’re cheaper. Contrary to perceptions that everyone is buying netbooks because they’re highly mobile, NPD Group found among consumer survey respondents that 60% of netbook buyers never took them out of the house. (Of course people might move them around the house on wireless networks, which goes to portability.)

The top-selling netbooks on Amazon all come in at under $300. In addition, most of the major US wireless carriers (and those abroad) have been subsidizing netbooks with a two-year contract. In the US, Sprint, AT&T and Verizon are all selling subsidized netbooks for $199 with a two-year service contract.

Google wouldn’t discuss pricing at the Chrome event. That’s up to the hardware partners apparently. Yet Google knows that to succeed a Google/Chrome netbook will need to come in at less than $400 at the highest end and potentially around $200 to really take off. The economics of that lower price point may be very difficult to achieve. Accordingly Google & partners may need to distribute via subsidized mobile carrier relationships to bring the price down to the point where it will really get consumers’ attention. I would speculate that Verizon, given the Google-Android relationship, is almost certainly going to do this.

Google promised these devices would start appearing before the “holiday shopping season” (read: Thanksgiving) in 2010. Of course the computer must work relatively well and not be a piece of junk. But here’s what it comes down to from a consumer perspective: If Google and its partners can build a machine that costs $300 or less, that carries the Google brand and is positioned as an “on the go” internet device not intended to replace your home computer it will probably have a winner on its hands.

The Google Mobile Blog announced that Google News on the iPhone, Android and other smart phone devices has a new design. The new design looks more like the desktop version of Google News with minor changes to make it fit better on the smartphone screens.

The new design has more stories and images, has personalization features, search and a neat “jump” to section feature. Here are screen captures:

The Google Webmaster Central blog has two excellent write ups on mobile SEO concerns and techniques. One is named Help Google index your mobile site and the other is named Running desktop and mobile versions of your site.

The reason for the two different articles is that often webmasters consider smart phone enabled sites as strictly mobile sites, but there are many mobile phones that have web browsers that don’t provide the rich experience that an iPhone or Android device do. If a webmaster wants to optimize their site for those devices and submit this type of content to Google, they can by learning how to create mobile friendly web pages for those devices and submitting a mobile sitemap.

At the same time, many webmasters prefer to not have a new URL for the same page based on accessing it on a desktop, iPhone or old-style mobile browser. Google’s second blog post explains how you can use the useragent to display a different stylesheet for showing the same content, in a different layout, for mobile devices and desktop devices. Google offered a diagram explaining how to do this without being considered cloaking:

To be honest, the best practices in this area are not 100% clear to me and I don’t think it is 100% clear to Google either. There are just too many ways to handle mobile devices, with so many different mobile browsers to use, plus handling printer friendly pages, desktop based pages, Internet Explorer versus Firefox or Safari and Chrome. Building out web sites that also comply with Google’s guidelines is complex, especially in the mobile front. These mobile blog posts from Google are useful but I, as do many, still have questions about handling this properly from a search spider perspective.

I actually have a clear write up on how I handled this for my corporate site on the Search Engine Roundtable, but like I said, there are multiple ways to achieve a mobile friendly site and comply with Google’s guidelines.

Yahoo has decided to discontinue its “Go” mobile app. Go was originally part of a larger “three screen” strategy that included TV and mobile delivery of Yahoo content. The Go app was intended as a way to have a richer, self-contained experience on mobile devices. But that strategy has given way to a “Yahoo for mobile” mobile portal approach that is consistent across most high-end mobile devices — and doesn’t require an app download. Of course Yahoo also still has mobile apps for selected smartphones, including the iPhone.

In fact the “Go” experience was never really that impressive and the newer mobile web experience is very strong:

Meanwhile at Google . . . TechCrunch is emphatically repeating the GPhone rumor that first surfaced via TheStreet in late October. TC believes that the phone is real and that the handset maker is LG or Samsung:

There won’t be any negotiation or compromise over the phone’s design of features – Google is dictating every last piece of it. No splintering of the Android OS that makes some applications unusable. Like the iPhone for Apple, this phone will be Google’s pure vision of what a phone should be.

So if true this will be Google’s version of the iPhone — what we always imagined the company was building before the launch of Android — but it will reportedly be “unlocked” and sold directly to the public, not through any carrier. However Google’s Android founder Andy Rubin has denied there will be a GPhone:

“We’re not making hardware,” Rubin told CNET. “We’re enabling other people to build hardware.”

Indeed, if Google were to build such a phone it would to some degree be competing with its hardware and carrier partners. There’s also the question of how much such a device would cost. In the US at least smartphones over about $200 are effectively not going to sell. Think about what happened when the iPhone’s price came dramatically down, courtesy of the AT&T subsidy, sales took off.

An unsubsidized GPhone would certainly cost more than $200 — and potentially much more. If you’re not eligible for the Sprint subsidy, for example, the Android HTC Hero in the US will cost you about $400. (I know this because I’m considering buying one.) But at the high end, such a phone could cost up to $600 or more. At $571 in the US (without a carrier subsidy) the Nokia “flagship” N97 smartphone has been a massive failure.

Google has flirted with the concept of an advertising subsidized handset in the past, at least conceptually in remarks made by CEO Eric Schmidt and others. But it would be tough to pull off in practice. MVNOs like Blyk in the UK have historically found that the appeal of “ads for minutes” programs are limited to select demographic groups (read: young and not affluent). Furthermore an ad-subsidized GPhone would potentially compromise the user experience, which is contrary to what TechCrunch claims is the objective of this device.

Indeed, TechCrunch is absolutely certain that a GPhone is coming. I hope so myself. I’m interested to see what “Google’s pure vision of what a phone should be” would be.

A new version of Google Earth for the iPhone is due soon, and among its new features is one with a personal touch: the ability to see maps you’ve created and/or saved in Google Maps. To make this happen, the new Google Earth iPhone app will add the ability to login to your Google account — a feature that could open up additional personalization doors in the future.

Google’s announcement today includes an example from product manager Dan Birch using the new feature to track a pair of attempts to summit Mount Ritter, in which the combination of GPS, KML, and My Maps were used together to show the summit attempts on the Google Earth iPhone app.

A more down-to-earth (pardon the pun) improvement aims to help users get through the sometimes cluttered combination of business listings, Panoramio photos, Wikipedia entries, and other icons that appear in the iPhone app.

When a user touches icons that are too close, a new screen will show them in list format for easier selection of the desired data type.

Finally, the new Google Earth iPhone app is now available in 31 languages, up from 18 in the original release.

Google says the app should be available in the next 24 hours.

You saw the rumors earlier in the week and we reached out to Google for confirmation of the reported Gizmo5 acquisition. But at the time they didn’t say anything. In fact they said, “We’re always talking to various companies about various things, but we don’t comment on rumor or speculation.” It’s no longer speculation because Google has confirmed that it has acquired Gizmo5, “a company that provides Internet-based calling software for mobile phones and computers.”

The estimated value of the deal is $30 million. As discussed indirectly on the Q3 Google earnings call, Gizmo5 represents one in a category of strategic “small acquisitions” that Google would be resuming, the company said.

The Gizmo5 team now joins Google Voice, enabling it to become a stand-alone phone service — like Skype. Skype is gaining momentum as an alternative to traditional telcos and wireless carriers in international calling situations. Skype has 480 million users around the world. For example, Skype with WiFi on my iPod Touch turns it into a phone. I spend $2.95 per month to make unlimited calls in the US and Canada. But I can easily switch my account online to cover Europe or the entire world for a very modest increase over that fee.

Expect a similar suite of calling plans and services to roll out from Google Voice, making the traditional telcos quite grumpy. Arguably Google has the capacity to popularize VoIP calling across networks in ways that even Skype cannot. Previously the Google Voice service required an underlying account and telephone  number from a traditional telco. Now it doesn’t need one.

When Google Voice originally launched, we asked whether Google Voice was going to become a “Next-Generation Telco?” The answer now is definitively “yes.”

One final thought: for regulatory purposes Google argulably now should be considered a telecom carrier.

During Google’s third quarter earnings call CEO Eric Schmidt expressed a kind of philosophical objection to corporate stock repurchase programs. But now in the wake of the $750 million acquisition of AdMob Google is going to do its first stock buy back to prevent investor dilution from the event.

During the Q3 earnings call the following question was asked of Schmidt: “What are the plans for Google’s large cash balances? Are stock buybacks being considered at any point?” Schmidt responded:

[CFO] Patrick [Pichette] and I were talking about who should answer this question. We have been doing very well in the cash generation front, throughout this whole year, which is a critical year. We have been able to be very strongly cash flow positive and we hope that that will continue for a long time. We love cash.

The issue with stock buybacks is historically they have often not achieved the objective that they’ve set out. So they are certainly none under consideration right now and I wouldn’t expect any time soon. I wouldn’t rule one out but I would not put it on your list of things to anticipate any time soon.

From our perspective the cash gives us a lot of operating and strategic flexibility over the very long term and so we are very happy to have it sit in our bank account and earn modest interest rates.

(Emphasis added.)

That was on October 15; today is November 12, less than a month later.

I would guess that Google was pretty far along in talks with AdMob about the acquisition at the point of the Q3 call but  perhaps unclear on how it would pay for and structure the deal. The stock transaction means that AdMob’s key personnel will be sticking around at least through some vesting period (at least two years). Getting their expertise was one of the explicit points of buying the company for Google.

Seeking to make Latitude, Google’s location-aware friend finder, more engaging and useful the company has added location history and alerts to the service. Location Alerts, which require Location History to be enabled, tell you when friends are in the area. The system is smart enough to recognize routine places like home and work so it will only send alerts when you and your friends are in an “unusual place.” According to the Google blog post:

Using your past location history, Location Alerts can recognize your regular, routine locations and not create alerts when you’re at places like home or work. Alerts will only be sent to you and any nearby friends when you’re either at an unusual place or at a routine place at an unusual time. 

Once turned on, Location History tracks your trip, movements and places you’ve been (that’s how it recognizes common and “unusual” places). It creates a kind of record of travels or activities. One could establish, for example, a My Map later of favorite places through Location History.

Google says that your history isn’t broadcast to your friends — although they can potentially see you move from place to place in real time if you allow them — and can be edited to remove places that you don’t want included in your history. While there are many practical use cases some people may be uncomfortable with the idea of all one’s movements being recorded. Not being of the “no privacy issues” generation, I rarely broadcast where I actually am on Latitude:

Accordingly you don’t have to enable Location History if you don’t want to, but you also don’t get the benefit of location alerts either.

Just as the introduction of the iPhone changed everything in the consumer world of mobile and helped usher in the era of the mobile internet, the pending Google acquisition of mobile display ad network AdMob is an almost equally significant event for mobile advertising. Over the past few years mobile advertising and marketing have been gaining steam, helped by a steady stream of research, positive case studies and evidence of mobile ad effectiveness — as well as the rich display units for the iPhone and other smartphones developed by AdMob and its competitors (Quattro, JumpTap, Millennial Media and others).

The fact of Google’s intended acquisition and the price tag ($750 million) help validate mobile (display) advertising in a number of ways. It’s the third largest acquisition price Google has paid, after YouTube and DoubleClick. It also shows how serious Google is about mobile advertising in general. According to an interview with Bloomberg, Google CEO Eric Schmidt said, “Our mobile revenue is growing faster than our regular revenue . . . All of the signs indicate a great success in this space.”

And rather than being publicly upset by the acquisition, AdMob’s competitors and others in the mobile ad universe are all but rejoicing. I was sent a link to a “facts” page Google had put together in support of the deal. Here’s a representative remark from Paran Johar, CMO of AdMob competitor JumpTap:

“The announcement is causing tremendous excitement as it validates the enormous potential of mobile advertising.  We predicted consolidation in the industry and Admob’s broad high volume business model is highly synergistic for Google.”

Many of the other players in the mobile ad network space now expect some sort of M&A activity to begin (a few years ago there were a number of mobile acquisitions by the big online players). That’s clearly one reason they’re excited. But Johar’s remark is accurate in that if nothing else it makes those in the digital marketing world take mobile seriously, if they weren’t doing so already. The “credibility” that Google brings to mobile advertising will accelerate mobile media buying and mobile ad revenues accordingly. 

Google is already the mobile search volume leader and it has been porting search ads over to smartphones automatically. On that front the company didn’t need any help. But its display efforts were, to date, fairly week in my opinion. With the AdMob network added to its own mobile AdSense efforts, Google arguably becomes the mobile ad network with the greatest reach in the US. But gaining the network and AdMob technology assets is only part of it for Mountain View. As Google Engineering VP Vic Gundotra told AdAge:

“Having [AdMob's] kind of talent and innovation within our own engineering teams is one of the primary drivers for this deal. … We think it really accelerates our progress in a very critical and strategically important area for us.”

The AdMob team will help coordinate and spearhead the next “iteration” of Google’s mobile ad efforts and strategy. Unlike on the PC where Google came late to display advertising with YouTube, DoubleClick and the DoubleClick Exchange, Google is now out in front in mobile display. Microsoft and Yahoo, which both have mobile display assets and growth aspirations, will need to respond to this move at some point in the near future. Yahoo had arguably been the leader in mobile display among the major search engines; however, Google’s move puts the company at least at parity — at least. 

I envision a time in the not-too-distant future when Google offers display ad buying across platforms through its Exchange. In a quick post-announcement briefing call Google VP Susan Wojcicki alluded to this (prompted by my question) in saying that she saw an opportunity to take an “holistic approach” to digital advertising. This is the dream that died a little when Google shuttered newspaper print ads and radio ads. But it rises again with this acquisition. And Google can also do some very interesting things now with mobile search and display combinations that it couldn’t do before. 

There are some analysts that have downplayed mobile display advertising as something that will fall way behind search or make up only a small percentage of mobile ad revenues. I think this move clearly shows that Google believes display is equally important in mobile and a powerful complement to what it’s doing on the search side.

Who expected the search wars to open a new front involving WiFi? Google, Bing & Yahoo have each just announced free WiFi promotions of various sorts.

Google, which previously said it would provide free WiFi on all Virgin America flights through early next year, is now going to provide it at 47 US airports through the end of the year. A partial list includes “Las Vegas, San Jose, Boston, Baltimore, Burbank, Houston, Indianapolis, Seattle, Miami, Ft. Lauderdale, Orlando, St. Louis and Charlotte. Additionally, as a result of this project, Burbank and Seattle airports will begin offering airport-wide free Wi-Fi indefinitely,” says the press release. (Here’s the full list.)

According to Fortune:

Upon signing in, users will be asked if they want to set Google as their homepage or try the Google Chrome browser.

The company is also running a charity campaign to raise money for three nonprofit groups: Engineers without Borders, One Economy Corporation and Climate Savers Computing Initiative. When Google WiFi users first log on, the landing page will offer them the option of donating to the organizations. Google will match donations of up to $250,000 per airport.

For its part, Bing and JiWire will offer free WiFi at a broad range of hotspots in airports and hotels, in exchange for users conducting a search on Bing. It’s part of JiWire’s “Ads for Access” program. According to MediaPost’s article:

Microsoft’s Bing and JiWire will announce Monday an advertising campaign, along with the results, that lets consumers gain free WiFi Internet access at participating hot spots in exchange for one search on the engine.

Supported by JiWire’s mobile advertising network, which reaches about 20 million unique consumers monthly, Bing’s nationwide campaign runs across WiFi hotspots in airports and hotels.

The campaign aims to make more people aware of Bing and allow them to try the search engine, according to David Blumenfeld, senior vice president of strategy and business development at JiWire. “We’re all creatures of habit, so giving away free Internet access in exchange for one search on Bing is a great way to change user behavior,” he says.

Finally, Yahoo is providing free WiFi in New York’s Times Square, which also has a mobile angle. In 2006, Yahoo had a deal with Starwood hotels that subsidized WiFi in the chain’s Sheraton hotels. That deal is no longer in force however.

All these efforts are welcome but they’re only temporary. Eventually there will be ubiquitous WiFi/4G connectivity that will enable people out in the world to connect at higher speeds, hopefully for lower cost, than they can today through traditional WiFi networks.