In a direct challenge to Microsoft, Google announced late Tuesday that it is developing an operating system for PCs that is tied to its Chrome Web browser.
The software, called the Google Chrome Operating System, is initially intended for use in the tiny, low-cost portable computers known as netbooks, which have been selling quickly even as demand for other PCs has plummeted. Google said it believed the software would also be able to power full-fledged PCs.
The move is likely to sharpen the already intense competition between Google and Microsoft, whose Windows operating system controls the basic functions of…

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