> "Google could blow most startups out of the water if they chose to focus on building exactly the same thing."

I'm not sure that's even true - look at buzz and wave. For all the time money and effort they've spent on that area they seem to have little return.

That sort of app isn't something you can win by technology alone, you need to capture users in a way that the users feel comfortable with.

But there is some history here, if I remember right, kiko (YC funded calendar) decided to close and sell on ebay when Google released their own calendar.