I'm impressed by Writely the real time and collaborative web word processor that Google has just bought. The program isn't even finished yet.
This is very much Google's style; buy the interesting start-ups. Yahoo will find the cash to buy those companies which have proven themselves to be real winners (Best Yahoo purchase? That has to be Flickr).
With Microsoft also working on an on demand Office I think we find ourselves at the start of the next big race. Those people who have been saying that Fat Server and Thin Client architecture will come back and rule the day may well be right.
It's the less wow pow upgrades from Google which I think will have the biggest impact in the short term. I'm very surprised that so little has been paid about Google Base accepting payments. This is probably because Google Base has been less than an impressive hit to date. However, if Google Purchases does manage to crack the micropayment saga then Google will have found a very real cash flow which does not depend on AdWords.
Not so impressive as the micropayments but still big news - especially to MSN's demographic targeting lure for AdCenter is Google's stealth addition of demographics to AdWords and SiteTargeting. At a glance Google's demographic information is not as impressive as MSN's but this could change. It is certainly unusual for Google to be so upfront about a collaboration and Comscore/MediaMetrix is in the limelight for being able to provide information to the Master of all Information.
What are people talking about? They're talking about Google giving some peanuts back to people (peanuts in credit) if you can prove Click Fraud. They've simply extended the window in which you have time to complain.