In a move that took everyone by surprise, Google announced a new downloadable product that installs on your hard drive, indexes your email, Word, Excel, Powerpoint, and AIM chat logs and adds them to the Google Search results window. The expected move was that Google would launch their own, Google-centric browser but they have once again side-stepped popular wisdom and done something that new and fantastic.

You’ll do a double-take the first time you run a search after installing Google Desktop Search. Up on top of your results, right under the paid search ads, you see links to personal email and files that contain hits on your query. Instead of bringing the web to your desktop, by putting hits on your desktop files into the Google UI it now looks (and feels) like Google has put your desktop onto the web.

Rael Dornfest explains what’s going on behind the scenes:

What’s actually going on is that the local Google Desktop server is intercepting any Google web searches, passing them on to in your stead, and running the same search against your computer’s local index. It’s then intercepting the Web search results as they come back from Google, pasting in local finds, and presenting it to you in your browser as a cohesive whole.

John Battelle caught up with Marissa Mayer, Google’s director of consumer web products, and found out that the app is only 400k and runs on only 8 MB of RAM. She also says that the relevance algorithm obviously doesn’t use PageRank but does use 150 other proprietary variables (bolding, font size, etc) to determine relevance.

Danny Sullivan writes in depth about this new tool going on to say that the Google page that you see when you launch Desktop Search is not actually on the web but is being served up by the web server that comes with the app. This is apparent when you see the address of the URL [] which is a local address.

Another benefit is the caching so that you can now quickly peek into the contents of a file without having to wait for Excel to fire up. If there are multiple copies in cache, there’s version history which can save you if you’ve overwritten a file using the same name.

It’s still in beta so I’ll forgive the fact that it only runs on Windows and indexes only AIM chat and Internet Explorer caches but other than that, this is a most impressive product that redefines its category.