I just read an interesting take on where Google is heading. Choice quote:

They have this huge map of the Web and are aware of how people move around in the virtual space it represents. They have the perfect place to store this map (one of the world's largest computers that's all but incapable of crashing). And they are clever at reading this map. Google knows what people write about, what they search for, what they shop for, they know who wants to advertise and how effective those advertisements are, and they're about to know how we communicate with friends and loved ones. What can they do with all that? Just about anything that collection of Ph.Ds can dream up.

It's an exciting idea. The author then falls off the track completely by concluding that Google should build a desktop OS.

Why in God's name would they want to do that? I doubt they could make any money directly. First, the design of the desktop itself isn't something their PhD's and giant database can help with - as we've found out, it mainly involves a lot of tweaking. Second, there's too much competition, and if they win all they get is the chance to sell something that most people will only buy once. The stakes are what Microsoft and Apple has - the chance to control the API - but they already have that as far as the Google server is concernced! Much better to make their Google tools crossplatform, and just piggyback off whatever OS is winning.