Google’s increasingly clever and bold initiatives to help people cope with virtual “paperwork” underscore their brilliancy in providing a simple and highly productive computing environment that is *not very dependent* on your own computer or your own computer skills.
Google is by far the most successful of the big players in creating really simple but powerful ways to use computer power *without* messing around much with the computer. Where MS applications sit on your own PC, Google’s site on the internet servers they run and manage. It’s a black box to some extent but it ‘s a box that *works*. Problem solving for the user is simplified to maintaining an internet connection rather than worrying about configuration of programs and hardware.
Perhaps even more important than the applications is that this shifts the perspective of the company in a very powerful way. You can even see this when talking to some of the Google folks who generally are less enamored with *making computers work* as they are with *making systems work*. It’s a bit of a broad generalization but I think it’s true that culturally speaking, Microsoft and MS folks generally talk (and think) in terms of how people need to relate to the computing environment where Google folks talk and think in terms of how they can adapt the environment to meet the needs of the user.
Where MS says “hey, you need to learn to use MS Word” Google says “Hey, we need to make it really easy to do Word Processing”.
Is this obvious? Perhaps, but I think the importance of this distinction is largely lost on MS management despite the fact that most of the new hires probably understand this challenge all too well. Ironically MS is in a better position than Google to leverage the fact everybody is using MS programs now (browser, OS).
Would it be *so hard* to create powerful, socially driven and enhanced software and hardware support sytems? Not really, but I’m guessing MS is very busy trying to protect the profitable paid support systems. Also, it is hard for many people with MS cultural sensibilities to visualize details of the future where they’ll be increasingly challenged by those who want to take the computing out of the computer.
Joe Duck 
There is a great deal to be said for this “give me the baby, not the labor pains” attitude. The computer is a tool to be utilized not a series of techniques and transformations. The ‘real world, real user’ viewpoint of Google will make more money than the ‘real cool algorithms’ viewpoint of Microsoft. Even if the user knows the difference between an algorithm and Al Gore’s Rythms, the user wants the answer, not an elegantly designed and executed program. “Value added retailer” is now a term to be applied to websites providing information services, not just hardware vendors providing systems.