Google today broke its silence to dismiss reports from America that it plans to launch a $200 (£115) personal computer.

"We have many PC partners who serve their markets exceedingly well and we see no need to enter that market," a Google spokesman told Times Online. "We would rather partner with great companies."

The basic premise of Tuesday's reports in the Los Angeles Times and New York Post - that Google will move away from services to get into hardware or even infrastructure - has been floating around for some time. It was, for example, suggested at one point that the company's founders were preparing to sponsor the world's first space elevator. Then came hints Google would invest in "dark fibre" networks - the miles of fibre optics laid in the 1990s, but never used.

The LA Times report built on a note from Robert Peck, a Bear Stearns analyst, who recently said Google was set to launch "Google Cubes" – simple network-based boxes that could link and control home entertainment and computer systems. "In fact, Google could over time become more of a hardware company than anything else," he said.

However, it does seem strange that Google would want to move away from high-margin online advertising, its core business, to enter low-margin hardware manufacture.

While providing cheap PCs to the masses would fit nicely with Google's "don't be evil" ethos, Google is a publicly-traded company. As such, it doesn't have a mandate to trade for anything other than the benefit of its shareholders. As the stock approaches $450, having floated in 2004 for $85, that is something Google has so far proven very good at.

In contrast, facing off against Dell and HP in the PC market isn't likely to win it any fans among investors.

However, something more imaginative might be more appealling, such as, cheap, so-called "dumb" terminals running on Linux (not Microsoft's Windows) that can be hooked up to web-based applications (where users pay a subscription to access online services such as e-mail or spreadsheet software). That this would cut Microsoft, Google's nemesis, out of the loop could be a real winner with investors and consumers alike.

The word is that Larry Page, Google's co-founder, will use a keynote speech at the Consumer Electronics Show in Las Vegas on Friday to unveil the company's plans. If you take Google's press people at face value, budget PCs won't figure.

But at the moment, the only certain thing is that it will be an event well worth following.

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