Why I'm not losing any sleep over Google

I've recently read some commentary on the fear that start-ups feel of the mighty Google (possibly sparked by the recent release of Google's storage service).

Now, I'm not going to argue that a start-up should be happy when Google releases a direct competitor. Neither should they take it as the end of the world...

Let's take a step back:
http://en.wikipedia.org/wiki/List_of_Google_products
http://en.wikipedia.org/wiki/List_of_Google_acquisitions

That's a pretty long list of products. Just skimming through it there are only a handful of Google products I might be afraid to compete against: Maps, Gmail, Blogger, YouTube, and of course their ad and search products. Even for these, the problem would be competing in crowded markets that require deep pockets and that already have several 900lb gorillas - not necessarily competing with Google itself.

2-3 years back, I was very impressed by Gmail, and then by Google Maps. I definitely saw Google as nimble, cutting-edge, full of great ideas - a start-up's worst nightmare. So how come none of the Google products outside their core - advertising and search - have emerged clear winners in their respective markets? Google Videos "lost" to Youtube; Orkut "lost" to Facebook and Myspace. Picasa, Blogger, Feedburner, and most of their Office products came from acquisitions.

More importantly, why should I be more afraid of my start-up getting "Googled", any more than I should fear my start-up getting, say, YCombinatored, or competition from any other source? Yes, Google starts off with more resources and a much larger audience - but they're not working 80-hour weeks, and their survival doesn't depend on the success of that one product. Looking at their product history, Google tends to acquire their side projects (advantage: start-ups), and when it's all said and done there's usually more than enough room left for competitors.

So, no, finding out that Google is releasing a competing product is never good news (other than validating that the market exists). But it's not really worse news than finding out about any other strong competitors.