So Google's Sergei Brin is worried about Microsoft's Bing? It's about time.
Now we will see the separation of the "men from the boys." Google has had a "protected" market for too long. It was the reason for the insane 50 and 60 P/E ratios prevailing just a few years ago. Now, the ratios are down to a more normal 20-30. Meanwhile, Googles' market cap is "capped" in the $100 billion-plus range, because Microsoft also has a ceiling in the $200 billion plus range. (And Google is still less than half the size of Microsoft.)
Google may have thought that it had the "search engine" market locked up. But that was a fallacy; Google (and today's Microsoft) aren't about search engines per se, they're about the whole networking revolution. My Space, You Tube, Twitter, etc. are all part of it. And here Microsoft.has an advantage with its greater experience in the stock market.
Google has prospered by doing one thing extremely well (by being a big fish in a small pond). It remains to be seen if it can continue to prosper as the "pond" joins with other "pools" and becomes bigger, which is to say that it will have to do a lot more things at least moderately well.
Full Disclosure: Long MSFT