I don't know if Google will be successful but it seems like many miss the point of what Google is aiming at doing. The point is not to challenge Microsoft at building the current kind of operating systems. The point is to drive the development of operating systems in the direction of web applications and cloud computing. And that is much needed.
It is a good project. Google has defined a clear mission. It knows Linux very well and understands the power of web apps and the cloud and how to harness it. After all, Google built its breakthrough technology on Linux and a cloud-style design making computers work together. Lastly, no matter how people cut this - it's perceived to taking up the competiton with Microsoft and there are very few companies that can do that in a credible way. Google is one of them.