Gmail

AdSense/AdWords

Google Scholar

Google Maps / Google Earth

Google Books

Google Image Search

Google Apps

Google Code

Google News

Chrome

SketchUp

"Innovation" in the strong sense of something super-radically new is not that important, at least to me. Let's not get distracted by that.

The reason I like Google is that things they make are well done. They don't have jingly-bobs popping up all over the place and lots of new "features" that actually make things worse. Their stuff has generally started simple and good, and gotten better. I don't find myself resenting using Google's stuff, cursing at the stupid bugs all the time. Their products have lots of nice little touches, like the way Google search will evaluate a mathematical expression or look up the time in a given location, and it searches PDF and PPT files and renders them decently in HTML. Google Groups now searches bulletin boards and discussion lists as well as Usenet groups. Google Maps does a really nice job of finding bus routes in San Francisco. It often just does what you want it to, without your having to ask, and without getting in the way.

When using most Microsoft products, I usually have the feeling that some "manager" has decided that there's no money in making things work nicely, but there is money in "shipping it". For example, the auto-numbering bugs that have been in MS-Word more than 10 years now and annoy people every single day.