There have been so many rumors regarding what Google will or will not do, that anyone would have a difficult time classifying all of them. And this is quite normal, since the search engine has the financial power to do just about anything it might want.

And the latest rumor that has emerged just before the opening of the Consumer Electronics Show in Las Vegas is that Google and Wal-Mart Stores may be preparing a low-cost PC that runs an operating system created by Google, which could be announced as early as Friday at the Consumer Electronics Show in Las Vegas.

The rumor has been launched by the Los Angeles Times newspaper who cited unnamed analyst sources and reported Sunday that such a Google PC could cost as little as a couple of hundred dollars, or less than the $430 a single share of Google stock is worth today–because it would avoid the need to install Microsoft’s Windows operating system.
Larry Page, Google’s cofounder and president of products, will give a keynote address on Friday at CES 2006, where many consumer products for the year ahead are introduced. The L.A. Times said that analysts “suspect” Page will use the high-profile forum to “show off a Google computing device or announce a partnership with a big retailer to sell such a machine.”

However, both Google and Wal-Mart have denied everything and clearly stated that no Google PC is being prepared.

Nevertheless, the development of another Google-developed device, a lot less advanced than a PC, is a lot more probable to be announced. Thus, Bear Stearns released a report last month speculating that consumers would soon be able to see “Google Cubes”, small hardware boxes that would allow users to move songs, videos, and other digital files between their computers and TV sets. In recent months, Google has also unveiled services and software delivered through the Internet that go beyond its core Web text search engine and match features provided by Microsoft applications.

“The cubes would be designed to be as “dumb” as possible (which is the whole point of making the network the computer), and Google would probably subsidize them so that they cost less than $20 or maybe even free (like AOL CDs),” explains Bear Stearns analyst Robert Peck in the note.

But, according to Eric Lai for Computerworld, Michael Gartenberg, a consumer Internet analyst with Jupiter Research, said that while Google has done a good job of “co-opting the Windows desktop away from Microsoft,” it faces an “astronomical challenge” if it wants to replace the OS itself. “You’re talking about going one-on-one with Microsoft and all of its partners, and creating a whole ecosystem of software applications on your own. Is it possible? Sure. Is it likely to be successful? It’s hard to imagine, unless there is something we don’t yet know about.”

What is likely is that Google, as it has done with its search appliances for enterprises, is seeking some way of using hardware to connect more people to its services, so it can deliver more ads and book more revenue. All we have to see now is what strategy will Google chose in order to attain its purpose. And knowing that the search engine has always been full of surprises, it will probably be an amazing one.