Does anyone remember how, less than a year ago, several commentators suggested Google was compiling a series of products that could emulate an online operating system? At the time, Google steadfastly denied such rumors. Yesterday, Google purchased Upstartle, the maker of a browser-based word processor called Writely.

Writely is an online word processor that enables multiple users to access and work on documents from any location. It can be used as a collaborative editing device and offers users online publishing options including the ability to convert Writely documents into “normal-looking web pages” or blog postings.

The acquisition of Upstartle, combined with other current and pending Google services poses a serious challenge to Microsoft’s desktop oriented products. Google is clearly building a suite of branded, browser-based applications that contains several daily use products designed to capture users from Microsoft Office.

Earlier today, Slashdot published a story suggesting Google is running a closed beta test of Google Calendar, including a link to a series of screen shots. The project, nicknamed CL2, will be integrated with Gmail in the future.

The stakes for both firms are high with Microsoft preparing to release its new Internet focused operating system, Vista before the end of 2006. Until recently, Microsoft was able to bank on the storage space offered by personal computers. Its operating systems run from the hard drive and most digital documents composed by computer users are stored on those users’ hard drives. The security of the hard-drive dependent storage system Microsoft enjoyed is about to change radically.

At its Analysts Day, held earlier this month, Google inadvertently announced the development of Gdrive, a virtually infinite, online data storage service. A series of slides offering preliminary details of Gdrive were included in notes for one of the day’s PowerPoint presentations but were later removed by Google.

"The notes were deleted from the slides we posted because they were not intended for publication," Google spokeswoman Lynn Fox said in an interview with vnunet.com. While she declined further comment, those notes also included financial projections that stretched into next year, forcing Google to file a statement with the SEC on March 7.

Shortly after the presentation, the CEO of Findory.com, Greg Linden, posted comments about them to his Geeking with Greg blog, before Google removed them. The full text of the notes from Google Analyst Day can be found here.

In his review of the deleted notes, Greg found a few interesting sentences. At one point in Slide 19, the text notes how Google is inspired by the idea of “… a world with infinite storage, bandwidth and CPU power.”

Google, like its competitors, is becoming a second generation web hosting firm. Another line from Slide 19 says Google wants to be able to “… house all user files including Emails, web history, pictures, bookmarks, etc and make it accessible from anywhere (any device, any platform, etc).”

Google’s capacity to store and retrieve personal information is already being applied to the corporate world. Google’s Desktop 3 includes an option that allows users who work on multiple computers, or multi-user work-groups, to search for items stored on the hard drives of multiple computers. Google keeps copies of files found on computers in the file-sharing network and transfers them from unit to unit as searches take place.

One of the more interesting lines Greg extracted from Slide 19 was the idea that files stored and shared through Gdrive would become the “Golden copy” of those documents. Gdrive, like Writely is designed to facilitate work-group collaboration, much like a central file server in most IT offices does now. The copy kept on the hard-drives of members of a working group will be a cache of the most recent version displayed on that particular computer, but not necessarily the most up-to-date document.

Google Labs is pushing the other major Internet and search firms to work harder and faster. The addition of Writely to Google’s stable of membership-based products raises another series of hurdles for Microsoft and might force them to refocus their Vista strategies. Microsoft was hoping to challenge Google’s search dominance by integrating search within the desktop and operating system. Google appears ready to flank them by moving applications formerly found on the desktop into its sphere of search-related products. 2006 is shaping up to be a most interesting year.