It now looks like that Google and/or others will use/extend Android to do just that. Asus is apparently considering deploying Android on their Netbook and in January 2009 it was reported that techies had already achieved this on an Eee PC.
If they do meld Android with Chrome and the Google Apps then you can see with the Google marketing machine a clear strategy and alternative to Microsoft in some areas.
I still believe Splashtop and variants could be a real challenger in the mid term, but this news isn't a good one for Microsoft particularly at the low end netbook space.
See latest news on Freescale's $100 netbook with Android. With the reduced computing power of Android, netbooks can be even cheaper and further undermine Microsoft in that wintel netbooks have to be more powerful and with an additional license cost.
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