So, yeah, everybody's gonna be buzzing about Google buying Pyra, but my take is that it's not really that great a fit.
Of course, Google bought Deja, which is the closest parallel as far as their acquisitions go. But Deja archived everything in Usenet, and Blogger only encompasses a part of the blogosphere. Granted, it's probably close to half, but relegating the incredibly intricate network of LiveJournal users and the aggregator-powered Radio users and the thought leaders who use Movable Type (including, amusingly, Gillmor himself, who broke the story) to second-class citizens seems like a critical misstep for Google's path so far.
More to the point, Google's consistent marketing message so far has been, "We do search, and we don't want to be a portal". My relationship with Pyra and Blogger goes back a long, long way and their tool has always seemed to be about creation of content.
Also, on a slight tangent, Google's never run a service that requires users to pay. Blogger Pro and all of the variations of BlogSpot Plus, not to mention BloggerDomains and whatever other auxiliary services Pyra offers, are all for-pay services, and though it's possible that Google is going to try to turn those users into people who pay for additional features from Google in the future, the reality is that it puts Google into a far different role than they've had so far.
The most relevant quote by Gillmor, to me is when he says, "The buyout is a huge boost to an enormously diverse genre of online publishing that has begun to change the equations of online news and information." I think competitors like LiveJournal, Nick Denton's Lafayette Project, Userland and Movable Type could be bigger winners long-term, or at least could be as big winners from this.
In all though, a very impressive deal. Congrats to Ev and the gang for pulling it off, and for broadening Google's vision. It'll be interesting to note what effect it has on Blogger's reliability and scalability. Back when Blogger was hacked, Steve sent me an indignant refutation of my assertion that the problem was with the development of weblog tools. His defense, which is entirely valid, is that the vulnerabilities tend to be in the platform software itself, and that it was to blame for most of the problems. It seemed kind of like he was saying "blame Rudy, not me!" while being too polite to actually say that out loud.
Now that the platform is moving to a presumably much more robust infrastructure, it'll be interesting to see what effect that has on the services they offer in the future. My sense is that weblogs as a whole are more valuable than any one platform, tool, or community of weblogs. Once Google's plan becomes clearer, it'll be possible to see whether Google's adoption of part of the blogosphere is prescient or unfortunately incomplete.