After the early start-up days, Google, like many larger companies, has struggled with adjacent markets. The company missed the boat on social media and GoogleWave was a disaster. That said, their indexing and search, translation, mail, online office, webmaster tools, advertising and VOIP are best in class.
I think it is healthy for a tech company to fail once in a while… it shows their willingness to take chances, etc. rather than acquire (and stagnate) successful start-ups.