In Web parlance, “chrome” is the part of the browser that surrounds the page: the address bar, the “Back” button, and those all-important bookmarks. Chrome is also the name of the Web browser that Google introduced back in September 2008, and–adding to the confusion–Chrome OS is the name of a new operating system that Google announced in July 2009 and expects to ship later this year.

The naming scheme is no accident. It reflects Google’s ambition to create an operating system that is all but indistinguishable from the browser. Gone will be the normal files, directories, and applications. Instead, Chrome OS will put Google’s cloud computing infrastructure–services and applications delivered over the Internet from its vast array of servers–at the heart of practically everything you do. Within a few years, Chrome OS could become the planet’s simplest, fastest, and safest environment for personal computing. But there’s a catch: it will also make Google the gatekeeper of your personal information. It could let Google delve further into your data to make its online advertising business more profitable than ever.

Chrome OS represents a radical new direction for computers. Today’s major operating systems–Windows, Mac OS, and Linux–are all based on the 1980s model of the workstation. They’re designed to run on powerful hardware, storing all the user’s data and programs on a nearby hard drive. Even the Web, as invented in 1989 by Tim Berners-Lee, was merely an extension of this computing model–a better tool for finding data on the network and bringing it to your computer. But people don’t use their computers that way anymore. At least, not people running popular Internet applications like Facebook, Gmail, and YouTube. When you use these applications, your data is stored in some distant data center–it’s crunched in the cloud, and only copied to your computer for viewing.

You can download Chrome the browser and run it on Mac, Windows, and Linux operating systems–and if you do, you’ll find that it’s noticeably faster than Apple’s Safari, Microsoft’s Internet Explorer, or Mozilla Firefox. Chrome also has less “chrome” than those browsers–no thick borders, no button bars or status lines. Google says that its vision is for the browser to get out of the way so that you can get closer to your data.

Chrome OS extends this strategy. It will be a Web browser running on top of a hardware-­controlling Linux kernel, and not a whole lot else. Chrome OS should take up less than a gigabyte of your computer’s hard drive, and the operating system will boot in seconds. It won’t have a “Start” button–it will just have the Google home page, with links to your favorite Internet applications. Panels will appear on the side of the main window when you connect the laptop to your digital camera or when you find a new wireless network.

The minimalist design makes Chrome OS ideal for netbook computers that have modest memory and processing power. Several netbooks already ship with lightweight browser-only operating systems that users can run as an alternative to Windows. Chrome OS is similar, but it will be tightly integrated with Google’s cloud-based services. After you log in to Chrome OS with your Google username and password, Google Docs will be there to let you edit and store documents, and Gmail will take care of your e-mail.

Today, you can download and run Chromium OS, a proof-of-concept prototype of what Chrome OS might be in a few months. I don’t advise it: Chromium OS is just not ready. But several computer makers, including Samsung and Acer, have announced plans for Chrome-powered netbooks, and Google may yet deliver a Chrome OS-­powered netbook computer that’s built, like the Nexus One cell phone, to the company’s own hardware specifications.

Google’s engineers have explained that Chrome OS will use your computer’s hard drive as a cache, making copies of whatever you’re working on so that you won’t burn up your netbook’s wireless data plan (or your batteries). All that personal data will be encrypted, so you won’t need to worry if you happen to lose the machine. And if for some reason your computer gets corrupted–perhaps by a virus–you’ll be able to wipe it and start over without losing any work at all, since your data is stored in the cloud.

If you’re a Google fan, employee, or stockholder, you’ll see Chrome OS as the latest of the company’s efforts to provide the best experience for users. If you’re a competitor, you’re probably more apprehensive to see Google extending its reach into operating systems. And if you’re a privacy activist, like me, this move probably reinforces your biggest fears about the Internet giant: true to its mission statement, it really is after all the world’s information.

Remember when, back in the 1990s, Microsoft tried to exploit the power that came with being the world’s dominant PC software company to make itself into the most important provider of Web browsers, Web servers, and Internet services? The same thing could happen again, only in reverse. Google, the king of Internet search and advertising, could use the strength of its Internet applications to muscle its way into your future netbook, and from there onto your desktop. Google’s vast array of Web properties will work best with the Chrome OS–not because Google is engaging in any monopolistic practices but because the system has been designed from the ground up to run complex Web apps. And if you can do everything inside a Web browser, why would you want to pay for a bigger, slower computer that has to be painstakingly managed?

The convergence of Chrome and Chrome OS with Google’s cloud-based services also represents a seismic shift in the world of privacy. In the 20 years that I’ve been writing about these issues, the most significant privacy threats have come from companies seeking to collect and sell personal information and governments trying to access those commercial data banks. Chrome OS changes the equation dramatically. Now, for the first time, consumers will be encouraged to store much of their personal information with a single company–a company that makes its money by mining user data. And all that personal information will be protected by nothing more than a single username and password. Worse, sometimes it might not be protected at all: after all, Google decided to enroll millions of Gmail users in Google Buzz without their permission, sharing many of their Gmail contacts in the process. Chrome OS users will no longer have to worry about storing, managing, or backing up their personal data. But what if Google’s vast data bank gets hacked, accidentally leaked, or shared with a pernicious government?

Many people mistakenly think that Google’s primary product is search, and that they are the company’s customers. In fact, a whopping $22.9 billion of Google’s $23.7 billion in 2009 revenues came from the sale of advertising. Google tracks and mines the behavior of its users in order to target its advertising more effectively. Consumer mouse clicks are Google’s real product, and advertisers are its true customers. Chrome and Chrome OS will give consumers more incentive to hand their personal data over to the Googleplex, further increasing Google’s inventory and click-through rates. And having access to that personal information will let Google do an even better job of targeting advertisements to users who are most likely to click.

Google’s real customers–that is, all those companies that spend billions each month to use its advertising services–will no doubt be pleased. More advertising space translates into a lower cost per click. But for ordinary users it may not be such good news. Today, you can still run applications locally, and keep your data exactly where you want. In the future, if you want to be part of Google’s revolution in personal computing, you may no longer have that choice.

Simson L. Garfinkel is a researcher and author based in california. His research includes work on computer forensics, privacy, and personal information management.