Google does innovate in some spaces but has largely innovated in order to gain entry in markets that already existed. As a rule of thumb, they've been very smart at breathing new innovations in those markets. However, their competitors are generally quick to notice and are catching up.
In terms of future offerings, the following products may come from Google over the next few months:
* An audio search engine, which will include a podcasting component (and possibly a podcast authoring component via blogger)
* A strategic partnership with Wikipedia or some other encyclopedia
Some type of clustered search offering
* A calendar product, which will probably inject new life in that space
* An auction offering, tied with an internal payment system
* A web hosting service that will scale from small entities to large ones and will include Gmail as part of the email offering
* Some type of access service, probably using their WiFi solution
Appendix: Answer: The shortest--and flattest--route there.
10 minutes ago