"Proposition 8 was a California ballot proposition in the November 4, 2008, general election. It changed the state Constitution to restrict the definition of marriage to opposite-sex couples and eliminated same-sex couples' right to marry, thereby overriding portions of the ruling of In re Marriage Cases."
Google's argument can be summarized as such: The law deters gays and lesbians from taking up residence in California, which is where the majority of Google's employees work. Thus the law is detrimental to Google in that its gay/lesbian employees may want to leave and prospective employees who happen to be gay/lesbian will have more hoops to jump through to work for Google.
This is particularly bad timing for such a thing as Google is in the process of laying off workers (though it is a very small number - something like 100) and if they are in a position where they have to layoff employees, why are they even talking about hiring employees? Of course the answer to this is simple - Google hopes to grow and something like this will be pertinent in the future - but some people are very shortsighted and will not recognize this.