
Google Shell
The Google Shell is Google's smart way of giving you a standalone terminal in your browser to access and manage your resources.
You activate the Google Shell by clicking on the >_ icon in the upper right part of the console page:

The browser window splits into half and the lower part is now a shell terminal:

This terminal runs on an f1-micro GCE VM with a Debian operating system. It is created on a per user and per session basis. It persists when your Cloud Shell session is active and is deleted after 20 minutes of inactivity. The instance runs on a persistent disk with 5 GB storage. Both the disk and the image are available at no extra cost. Although the instance is not persistent across sessions, its associated disk is persistent across sessions. Everything you create via the Google Shell will be available as you've left it at the beginning of your next session. This includes all the files you store, the software you install and the configuration files you edit (.bashrc and .vimrc for instance). This disk is private and cannot be accessed by other users. And, finally, the Google Shell instance comes pre-installed with the Google Cloud SDK and other popular developer tools such as VIM.
Some of the commands you run via the web console will be memorized in your Google Shell VM. For instance, the SQL queries you run on a Google SQL instance, will show up in a .mysql_history file in your user's $HOME folder. More info on the Google Shell can be found in the README-cloudshell.txt in your $HOME folder.
From the Google Shell, you can access and manage all your resources and files. For example, let's list all our existing instances by typing:
$ gcloud compute instances list
We see our newly created sparrow instance:

To access the VM you just created, type in:
This will run through the creation of the necessary ssh keys. And you are now no longer on the Google's Cloud Shell VM instance but on the sparrow VM. To check which OS and version we're running in our sparrow instance, we run:
On the sparrow machine, I have Debian GNU/Linux 9 (stretch), while on the Google Shell VM, it's Debian GNU/Linux 8 (jessie). Which tells me that the Google Shell is not yet on the most recent version of the Debian distribution. You may, of course, see different results.