Ars Technica has received confirmation from two sources that Google is working on new software named Google Chrome OS, which will offer a cloud-based, OS experience around the browser. And rumours also suggest it could be released as early as tomorrow.
Ars says the details are pretty slim for the time being, but they predict that the OS would feature the full suite of Google Apps (just out of beta today, btw). They don't think the OS would be an Android port either, since the Android browser uses significantly different chunks of code than Chrome. Android is also designed around touchscreen functionality, so that makes sense. But Ars doesn't dismiss the possibility that they might be working on a lightweight, standalone Linux OS, either. But for now, as it's still in rumour phase, we'll have to wait and see. [Ars Technica]