January
Google agrees to censor search results in China. "In order to operate from China, we have removed some content from the search results available on Google.cn, in response to local law, regulation or policy. While removing search results is inconsistent with Google’s mission, providing no information (or a heavily degraded user experience that amounts to no information) is more inconsistent with our mission."
Compare the image search results for [Tiananmen] in Google China (screenshot below) with the uncensored results.
February
Google integrates instant messaging into Gmail. Google saves your chat history and lets you search it.
March
Google acquires Writely, an online word processor, that will later become a part of Google Docs & Spreadsheets.
April
Google Calendar launches: it's easy to use, integrated with Gmail, you can create and share events. Later on, Google will add search for public events.
May
Google Co-op is a new platform that involves improving search results by using experts and communities. Google Co-op is behind the search refinements you see for health-related queries (and others), Google Accessible Search, custom search engines.
June
Google Checkout, an easier and safer way to make payments. But also an incentive for AdWords advertisers.
July
Google is officially an English word.
August
Google Apps for Your Domain lets you access Google services using custom mail addresses.
September
Google Reader has a new interface and becomes one of the best online feed readers.
October
Google buys YouTube for $1.65 billion in stock. This way, Google gets more exposure for its contextual video ads and admits Google Video wasn't too successful.
November
A sign that Google had a great financial year: on November 21, Google's shares jumped to $509.65.
December
Google officially launches the new version of Blogger that adds dynamic publishing, labels, and a more flexible template editor.