The theoretical or perceived notion that Google is going after Microsoft is somewhat of a joke. Google itself has not stated in any shape or form that they are intending of attacking Microsoft, but of course, Ballmer goes after everybody, not just Google, because he's just that kind of guy.
Eric Schmidt of Google states, "velocity matters." It sure does, and that is the one of the biggest reasons that Google succeeds. Software update cycles are commonplace and take place behind the scenes. If you haven't noticed, Gmail has done a major upgrade two weeks ago dealing with performance issues and a number of interface upgrades. This type of velocity doesn't take place at Microsoft which has a history of forcing upgrades for security issues, but also releasing patches way too far apart giving users somewhat of a disparate upgrade experience. The Microsoft periodic upgrades will shock people because of major changes, contrary to what Google does is by constantly changing their interface slowly and allowing users to test it out features one at a time rather than being overwhelmed with a complete interface overhaul.
How can someone state that Google is out to make money. Sure, it make tons of money. But it's all advertising.
For all of its achievements, no one can point at Google stating that its primary interest is to make money. Their bottom line so far is providing free services which have improved the overall Internet experience for everyone. Yes, Google's products are encroaching on Microsoft's marked territory (Office applications) and thus issuing a challenge, whether intended or not.
But, seriously, if people choose Google, then it's obviously for a good reason.
Google is much more serious about designing usable and innovative software. And everyone knows the bottom line is Microsoft is still about making money.