Do you think they want to create some distance between them and the rest of Google because ofd Google's reputation of shutting down products? Or maybe they want to launch a product outside the usual bureaucracy?
It literally just has no backing by Google's corporate or business goals.
I laughed at that, at first, thinking it were a joke.
No, no that's a quote from https://area120.google.com/
Even before the “internal incubator” that this came out of, Google hasn't been known for doing a single exclusive offering in a space, so this probably wasn't centrally green lot (because otherwise “internal incubator” makes little sense), and it's release wouldn't (even if it was) exclude another Google offering in the same space. The competitive process you imagine just doesn't seem likely to even approximate the truth.