I'm really surprised to see Google getting into content, as they don't seem like a content company. I'm reminded of Yahoo buying Geocities back in 1998 or so, but I never thought Google wanted to be a portal. Still, it'll make blogging all that more mainstream if it's linked off the root of google.com.
update: after sleeping on it, I came up with this. I don't know if I'm right, but it seems right to me. If google can get better results almost instantly, why not pick up pyra and watch the movements of all the blog data in realtime for links?