Google is making the right bet. Computing is under going a form-factor change on two fronts, and Google must stay relevant in most as desktop computer slowly takes a back seat. The obvious of the two is the growth in mobile computing, where content providers will have to struggle against vertical interest of gatekeepers such as carriers and Apple. The smaller, but still interesting change is the transition from desktop to TV in the home.

There’s no compelling reason have a separate “computer” desk at home when computing is converging with entertainment. What we need is new form-factors of PCs (or media boxes, or consoles) and new form-factors of input devices.  Given typical usage patterns, I think the desktop form factor will disappear from residential use and split into living room + laptop/smartphone (depending on user preference).