I wish I could downmod for the overly sensational title. So Google's doing something that a lot of other big tech companies do, so what? If the article had said Google was starting a YC-clone, that would've been something.
This seems like such an obvious thing to do if you're a huge tech company, why hasn't MSFT or YHOO done this yet? I have a hard time thinking this is a good thing, the last thing we need is Google dominating the VC market.
For some reason, it doesn't even seem to have the same appeal as YC. If given the choice, I would much rather work with YC. I'm a bigger fan of Paul Graham than I am of anyone in Google.