Holy crap, indeed. This little news item will soon be #1 with a bullet, but Ev just announced at the Blogosphere panel I attended that Google bought Blogger. Ev told me after the panel that the deal has been in the works for four months and he's already moved offices from San Francisco to Mountain View.
I would expect this means dedicated searching and ranking of weblogs a la Daypop/Blogdex, displaying aggregated weblog content in Google News, and time-based searching of weblogs. But they could do all those things now... Why buy Pyra? Is Google moving toward an expanded portal model of offering publishing/hosting services beyond searching?