There is more at stake than this. The danger for Google is that Microsoft controls the experience of most clients. If Microsoft's services become the standard

There is more at stake than this. The danger for Google is that Microsoft controls the experience of most clients. If Microsoft's services become the standard then this cuts off Google's revenue and kills their business. It's easy to see what Microsoft would like, office online users to use Silverlight "for better rendering" which really means windows and ultimately IE. This matters to Google in the long term, hence their move into software/hardware to provide competition.