A few years ago, they were one of the only players in the IM game, alongside MSN, AOL IM, ICQ... have you heard about any of these lately? Of course not, they're all dead.
Talk was built on top of XMPP, an open protocol, which helped its popularity as third party clients could connect to it. Talk was also built in to gmail, and at the time that was revolutionary: A fast and lightweight chat app, right in your browser. In (one of?) the most popular mail service providers at the time!
Google has failed to capitalize on any of that. They completely ignored Talk. But then when Facebook did the same thing, oh suddenly they had to compete. So they rebuilt Talk on top of a new protocol. This time, it's proprietary. This time, it's much slower in the browser. Oh and you lose half your contacts if you upgrade to it. But at least now it works on phones?
So they tried building this new closed chat ecosystem for no good reason, and they used their Android market share to do that. People didn't like it, still used Whatsapp, still used FB Messenger, still used Viber, and the now hundreds of alternatives there are, all incompatible with one another because everybody's gotta reinvent the wheel.
You know, I can get behind that XMPP wasn't up to the task - I tried dealing with XMPP myself and it's a frustrating piece of work. But the way Google has treated IM is appalling. Really backwards. They built a good product, then completely ignored it, then built another in an attempt to reinvent it and become more locked down, butchered the old one and are now losing everything. Who's making these decisions exactly?
Matrix is probably our best bet when it comes to open chat protocols, but it's honestly not mainstream ready. In the mean time, I use Discord (https://discordapp.com/) for essentially all my communications. I have completely moved off Talk, Hangouts, Skype and even most of IRC (which has frankly fallen way too far behind more recent comms tech, even as an open protocol). It's proprietary, but at least it gives me text+voice (+ soon video) and doesn't suck - and there is no open choice I can make at this point that is approachable enough that I can convert people to it.