Every time I read an article like this, I think of Google Lively. Google entering a space != Google crushing the competition.

Agreed - this article would be better titled "Nine startup dreams and industries Google released competing products for in 2009".

Entering a space by charging competitive prices is different from offering things for free. Maybe the goal was not to crush competition, but it has the same effect.

Not that I don't agree, but I really don't think that 3D Avatars are ever going to be a marketspace worth competing in.

Thought Etherpad might bear a mention in the bit about wave.