Agreed, I can't say I have the feeling they lost their focus. When it comes to their core products (Search, Maps) they're still miles ahead of the competition. And for the rest they offer a very decent offering (Gmail, Docs, Google+, Android, etc). Not much better or worse than the competition there, they still manage to stay at the top.
Can't say that of Microsoft - falling behind with Windows (they still have the critical mass though), IE caught napping by FF and Chrome, totally lost the mobile market, and the rest of their products are generally faltering and also-runs at best. Office is arguably the best in it's league but the competition is catching up quickly, with "more than good enough for the home user" type products. Not much room for innovation in Office too.