Speculation has centred on ideas that:
- Google wants to leverage the content from blogger - but why, they index the content from CNN but haven't bought the company to ensure they have free access?
- Google needs a publishing system - but surely the Google Labs guys could knock something up very quickly that was superior?
- Google is doing the blogosphere an altruistic favour in the same way that it turned the Usenet archive into Google Groups
My personal theory is that the company was very cheap for its huge user-base, and think about the power of combining Google Webquotes technology with a huge active base of people making comments 24/7, when the comments are within your server farm and don't have to be crawled