The way to beat Google is to create a product with a superior user experience.

Two notable examples:

1. Facebook beating Google's Orkut. 2. Youtube beating Google Video.

In addition, the fact that some of Google's products launch with ugly or complex user interfaces creates a clear and present opportunity for startups with good design skills and a focus on usability.

For example, I created Trafficspaces simply because I felt Google Ad Manager and OpenX were both a royal pain in the ass to use.