Last month I wrote an article called Google's Redundant Virtual World which basically speculated on the idea of Google creating its own clone of Second Life using the already existing Google Earth interface.
Today further news have signalled at least a healthy amount of interest and curiosity from Google's behalf concerning gaming. As TechCrunch reports Google has purchased video game advertiser Adscape for $23 million. "Adscape is a video game advertising company whose AdverPlay product lets developers place dynamic ads right inside the game and Real Virtual Gateway product enables two-way text, audio and video communication via SMS Text or eMail."
If you couple that purchase with the recent purchase of the 3D modeling tool Skatchup and place it on the Google Earth interface, you have yourself a Second Life competitor.
Naturally for all we know they might be going a completely different route and planning on either developing or just advertising (the second is highly unlikely however, due to all other tools available). Actually they might just be going on a shopping spree.
But knowing Google I wouldn't count on it and if I were Second Life I would be getting ready to give a large piece of the pie.