The internet isn't the world, much as we net-heads would like to imagine it is. There's a whole economy out there, and Google is still just a smallish part of it. They won't be taking over until your average person spends money on them on a weekly basis. When they start selling groceries, then we can worry.
I dont think so, there will probably be someone with bigger and better ideas to come along,, and who knows where the net will be in 5 or 10 years.
I see an overlap but google and microsoft will dominate thier fields. Google will dominate internet but branch into desktop apps and microsoft will dominate software but they branch into internet a little as wqll. Microsoft and google can coexist with some overlap.