[Adaptive]

Google had a chance to be the open standards communications platform. Just as Gmail succeeds in the world of federated email, Google was poised to do the same with standards based chat, RSS, etc.

Vic Gundotra, with apparently passive approval from above, killed all that and Google lost its only real differentiator in this competition: not being the centralized bad guys.

[Touche]

I think that's a bit unfair as Google tried to federate social networking many times but failed (ActivityStreams is one that comes to mind but there were several others).

The big change, imo, came when Larry Page returned as CEO. He shifted the company's strategy away from "technology" and towards "products". In same cases this was a major success, it's when Android started to actually improve its UX, but it also meant no longer focusing on things like standards as much.