Direct from Google headquarters and liveblogged by John Paczkowski, Google unveiled its Chrome OS. This is the first of three segments:

Google did not offer a beta of the new operating system today. Vice President of Product Management Sundar Pichai says Google is a year away from an official launch. The company, however, is making Chrome OS code available today.

According to Pichai, Google’s Chrome browser has some 40 million users one year after launch. He boasts about the browser’s speed, noting that it handles Javascript 39 times faster than Internet Explorer. There will be three more big Chrome announcements in the future: Chrome for Mac, Chrome for Linux and the debut of Chrome Extensions.

Google’s goal is to ensure that Web applications function as well as desktop apps, Pichai explains. The company is figuring out a way for Web apps to safely take advantage of the operating system in the same way that desktop apps do. A few examples: Graphics, video/audio applications, real-time communication, notification and local storage.

“By 2010 we expect to have all these things built into Chrome.”

The advent of Chrome coincides with a perfect storm of converging trends, Pichai notes, including the tremendous popularity of netbooks during the recession, the growing acceptance of cloud apps and the rapid innovation in mobile devices. Smartphones are becoming more like laptops, he adds, and laptops are becoming more like smartphones. Is there a better level of computing available for these devices? There is, says Pichai, and he believes it is Chrome OS.

In advance of its shareholder meeting today, Google is holding a press event at its Mountain View, Calif., campus with CEO Eric Schmidt presiding. Also on hand: Dave Drummond, senior vice president of corporate development; Susan Wojcicki, vice president for product management, Kent Walker, general counsel, and Marissa Mayer, vice president, search products and user experience.

Hot topics of the day: Google’s and Apple’s interlocking boards, YouTube and the company’s thoughts on the econalypse, AOL and netbooks.

This liveblog paraphrases most questions and answers. It is not, in other words, a verbatim transcript of the event.

A theme of the meeting is the just-opened inquiry by the Federal Trade Commission into Apple’s and Google’s interlocking boards. Schmidt gets right into the topic with a joke: Looks like we’re at a legal deposition. He adds that he doesn’t believe Google (GOOG) views Apple (AAPL) as a primary competitor. If there are issues that are competitive during a board meeting, he will recuse himself, he says, just as he has regarding the iPhone.

Would Schmidt consider resigning from the Apple board?

Schmidt: “Hasn’t crossed my mind.” Ken Walker adds: “The law is clear that there is safe harbor for companies that don’t have overlapping revenues, and we’re comfortable with that position.”

Regarding the recession, are there any signs that we’re at the bottom?

Schmidt: “We don’t yet see a change.”

As Google gets bigger and faces more antitrust scrutiny, does this change how the company approaches partnerships?

Schmidt: Information is incredibly important, and we should expect governments around the world to pay attention to what we do and hold us to the principles we’ve articulated. Internally we tell our employees to pay attention, there are consequences to mistakes they make.

In the last few years, we’ve worked harder to anticipate the concerns of people affected by the power of the Internet. In my biased judgment, we’re getting better at anticipating those concerns.

We are more careful about when and how we do things that are raising the concerns of any party, but that care doesn’t stop us from doing those things.

Is there anything you haven’t done because of that?

Schmidt: I can’t think of a specific.

What do you think of the long-time monetization potential of social networks?

Susan Wojcicki: “We’ve been learning a lot about monetizing social inventory. And we believe there are ways to monetizie it over time, but those ways are different from search.”

Why did Google decide to sell its stake in AOL?

Schmidt: “We love AOL….We also like money… and look, we sent our best guy over there to run it,” he says referring to Tim Armstrong who recently left Google for AOL.

When will YouTube be profitable?

Schmidt: YouTube will eventually be a successful product and business. We don’t know how long that will take. But YouTube is a huge traffic phenomenon. (Wojicki jumps in to note that that traffic is attracting a lot of advertiser interest, so there is monetization going on. She adds that Google is adding new ad formats to the site, prerolls and click-to-buy ads on music videos.)

How does Google continue innovating given the cost-cutting measures it recently implemented?

Schmidt Innovation is a cultural value at Google, so this hasn’t really been an issue. Cutbacks were more efficiency-related, a move to stay lean but nimble in the midst of a recession.

What’s your take on the balance between Android being an open platform and the trade-offs the company needs to make with handset makers?

Schmidt: “On the one hand, you benefit by having free access; on the other hand there is some sacrifice of stability. We are doing our best to achieve stability without exercising too much control.”

What about China?

Dave Drummond: It’s an “ongoing challenge” to operate there. YouTube is blocked. There is a government preference for local business that makes things very difficult. That said, “we think we’re doing well there.”

Schmidt: “We will continue to do business in China….We would like YouTube unblocked.”

How do you respond to critics who argue that Google is the new Microsoft (MSFT)?

Schmidt: “They obviously don’t remember the old Microsoft.”

In recent public forums you’ve been asked about acquisitions and you’ve said the price isn’t right right now. Has there been any change in that opinion?

Schmidt: No change. There’s simply just not a lot of activity out there now.

What are your thoughts on netbooks?

Schmidt: “The netbook phenomenon looks very real. It looks like it will be a significant element of growth in the PC industry over the next few years.” Schmidt further notes that Google is obviously interested in the market given its business. “Watch the space,” he concludes.

“The ornamental design for an electronic media reader, as shown and described.”

About as exciting as the original Kindle design it describes, but this isn’t a utility patent, so you can’t really expect much from it. That said, the reference citations it contains are interesting. Among the devices included: the iRex iLiad, the NUUTbook an early prototype of the One Laptop Per Child Foundation’s XO laptop and Apple’s MacBook Pro.

Note: Be sure to see the liveblog of the Amazon announcement in New York by MediaMemo’s Peter Kafka, starting at 10:30 a.m. EDT.

BoomTown posted from various spots in Europe this week, yet managed to follow the geek-tastic goodness of Silicon Valley’s own contender, Apple (AAPL) co-founder Steve Wozniak, who competed while injured this week on “Dancing With the Stars”–and escaped elimination via the love of viewers in Silicon Valley and elsewhere. Another founder made the headlines this week–BoomTown noted that Steve Case appeared at a huge pep rally at Time Warner’s (TWX) AOL. Case and former AOL exec Ted Leonsis gave their support (and a lucky green tie) to new CEO Tim Armstrong. Elsewhere, Pure Digital, the maker of BoomTown’s favorite gadget–the ever-present Flip digital video camera–sold itself to Cisco (CSCO) for $590 million in stock, and BoomTown urged Silicon Valley to remember it’s not immune to the recession, to put its nose to the grindstone and to avoid party-hearty inanity.

Guess no one’s taking heed of the warning, though: MediaMemo reports that no one’s getting anything done at work–CBS (CBS) says its March Madness Web traffic is up 57 percent compared to last year. On top of that, television viewership rose various percentages throughout the week. MM wasn’t watching much basketball this week, though–there was plenty to blog about: The New York Times (NYT) cracked down on unauthorized use of its photos; Discovery Communications (DISCA) announced a patent infringement suit against Amazon and its Kindle Reader; Palm (PALM) delivered dismal third quarter results, putting even greater pressure on the success of the Pre; and in a Q&A with BusinessWeek editor Stephen Adler, Steve Ballmer said he’s open to a phone call from Yahoo (YHOO) CEO Carol Bartz whenever she’s ready to talk. Oh, and in case you were wondering what happened at SXSW, MediaMemo got a Google (GOOG) guy to explain it.

Digital Daily’s March Madness started with a liveblog of Apple’s St. Patrick’s Day press event to unveil version 3.0 of its iPhone OS, a chronicle of the myriad features displayed onstage and a live photoblog to back it up. DD noted that sales of the iPod touch and iPhone have outstripped RIM’s (RIMM) combined BlackBerry sales by a factor of… well, by a LOT. Kind of supports the data that say mobile Web use doubled over the last year. Which is good, because Mac sales were no good in February.

In Personal Technology, Walt Mossberg reviewed the latest release of Microsoft IE8 (MSFT), its most comprehensive release in many years. His verdict? Mixed, of course. In Mossberg’s Mailbox, Walt talked to readers about the many models of BlackBerry phones and how they differ from one another, the new iPod shuffle and its earphone compatibility and upgrading Vista to Windows 7. In the Mossberg Solution, Katie Boehret reviewed the Ee Top, Asus’s first foray into the all-in-one PC market.

More next week. Go Woz!

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