Google Inc. is working on a new operating system for inexpensive computers in a daring attempt to wrest away Microsoft Corp.'s long-running control over people's computing experience.

The new operating system, announced late Tuesday night on Google's Web site, will be based on the company's nine-month-old Web browser, Chrome. Google intends to rely on help from the community of open-source programmers to develop the Chrome operating system, which is expected to begin running computers in the second half of 2010.

• Click here to visit FOXNews.com's Personal Technology Center.

The Mountain View, Calif.-based company disclosed its plans for the operating system shortly after an online technology news service, Ars Technica, and The New York Times telegraphed the news on their Web sites.

Google is designing the operating system primarily for "netbooks," a lower-cost, less powerful breed of laptop computers that is becoming increasingly popular among budget-conscious consumers primarily interested in surfing the Web.

The operating system represents Google's boldest challenge yet to its biggest nemesis — Microsoft.

A high-stakes duel between the two technology powerhouses has been steadily escalating in recent years as Google's dominance of the Internet's lucrative search market has given it the means to threaten Microsoft in ways that few other companies can.

Google already has rankled Microsoft by luring away some of its top employees and developing an online suite of computer programs that provide an alternative to Microsoft's top-selling word processing, spreaoperating system later this week when they appear at a media conference hosted by Allen & Co. at the Sun Valley resort in Idaho.

Despite its own power and prominence, Google won't have an easy time changing the status quo that has governed the personal computing industry for so long.

As an example of how difficult it is to topple a long-established market leader, Google estimates about 30 million people are now using its Chrome browser — a fraction of those that rely on Microsoft's market-leading Internet Explorer. And there have been various attempts to develop open-source software to undermine Microsoft with relatively little effect.

The Chrome operating system will run in a new windowing system on top of a Linux kernel — computer coding that has been the foundation for the open-source software movement for nearly two decades.

Google has already introduced an operating system for mobile devices, called Android, that vies against various other systems, including ones made by Microsoft and Apple Inc.

The Android system worked well enough to entice some computer makers to begin developing netbooks that will eventually run on it.

Google, though, apparently believes a Chrome-based system will be better suited for running applications in netbooks.

"We believe choice will drive innovation for the benefit of everyone, including Google," wrote Pichai and Upson.