Google may be changing the Internet as we know it again with their new product, Google Wave.

While it won’t be released widely until the end of the year, Google Wave still made an enormous splash when it was introduced to the world yesterday at a conference.  Wave is taking aim to create a whole new communication experience that brings together email, chat, file transfer and a lot more.

First up, let’s take a look at how it will appear (click the image for a larger view):

As you can see it feels a lot like Gmail, but there is a lot more going on in it without making it feeling overwhelming.  As you converse in email with your contact, your reply is added to any section you choose so that your comments always stay in context.  Original sender replies again?  Then their section is also put in context, so you are truly getting threaded conversations with this tool.  If the conversation gets really long and you aren’t sure who added something and when, you click the playback button and the history will replay for you in the order people worked on it.

File transfer just got worlds easier also with drag-and-drop interface so you will no longer have to send an attachment and annoy people.  You will drag the file in to the Wave folder and the file will begin transferring automatically.

Wave will be perfect for friends, families, work projects and just about anything you can think of.  And the scariest part?  It’s open source.  This means that people will be able to change Wave any way they please to make it fit their own needs more specifically.

It’s hard to wrap your head around a product that barely any one has ever touched it yet, but my mind is already racing with the possibilities of what this tool will do for people.  I can’t wait to get my hands on it.

Now, if you want to learn loads about it, you can watch the hour and 20 minute presentation below.