well I think all this "google" is taking over crap is just that, non-sense.
It's like saying that because delphi (car radio manufacturer) makes 3 billion a year more than GM, that GM is doomed.
It's a related industry, but for the most part, not a competition. The only areas where they compete directly are Search Engines (I prefer MSN personally because of better, more accurate, relevant and timely results) and contextual ads (well, soon anyways).
Google won't be making an OS in the foreseeable future...and would need 5-7 years to get it from idea to "shelves" regardless.
Despite the fact that the majority of people like Microsoft products and services and are willing to buy them, Google is however attempting to break into some of Microsoft's markets (Word as an example). But most do not trust open source, 2nd rate software... and with good cause. There is no liability factor (eg, you cannot sue someone if it breaks down massively) and once something like googles word attempt gets massive exposure, hackers and viri will target it... and without the support that Microsoft can give it's customers... who will be there for those fools using the google opensource junk?
Certainly not google.