Google is working on a new operating system for personal computers in an attempt to grab a share in the OS market, which is currently dominated by Microsoft’s Windows operating system.

The new operating system, as announced on Google’s blog, will be based on the company’s nine-month-old Chrome web browser. It is said to be designed for people who spend much of their time on the web.

Google has already offered a suite of e-mail, web and other software products that compete with Microsoft products. The company said that the new operating system will be an open source, targeting the netbooks initially.

The company posted in a blog that it is working with multiple manufacturers, and the new software would be available on netbooks in the second half of 2010.

According to industry sources, the Linux-based OS will also affect other Linux operating systems which have seen some success on netbooks.

Earlier, Microsoft has launched search engine Bing, in a move to challenge Google. According to StatCounter, a web analytics firm, Bing has secured 8.23% of all the US-based searches in the month of June, up from 7.21% in May. On the other end, during the same time span, Google dropped from 78.72% to 78.48% of the US searches.