There are quite a few teams working on driveless cars. for example six won the last DARPA challenge , a european funded vehicle won did a 8000 miles trip from italy to china , israel is using similar technologies for military purposes, and GM and folksvagen is working on systems.
from the other side , google's total investment in the project is a yearly $15 million ,which is not unsourmountable.
I don't have a very deep knowledge about this , but my guess is that the big competitive barriers here are gaining enough real life experience , legal and regulatory barriers , and branding.
The companies that would make most the money from this technology would have those strengths. this looks more like a big car company than google.
Google hired many of those involved in the DARPA Urban challenge, and they are leading the effort. In particular, Sebastian Thrun, who appears to be in charge of Google's program, was the head of the winning Stanford team.
Additionally, Google's cars are already far more sophisticated than those that won the Challenge, which involved navigating a relatively simplistic simulated urban environment. According to their blog post on the subject [0] Google has been running their autonomous cars on real roads and highways in real traffic, a dramatically harder problem.
You can buy cars today that can almost drive by itself. Adaptive cruise control. Automated parking. Lane assist. Automatic braking to avoid accidents. BMW has demonstrated a driverless racing lap on Top Gear before can be seen in the link I posted in another comment.
I was downvoted for asking what this Google car did that other companies haven't already demonstrated. No answer though.
Also a good example. 37Signals has great advice here: sell your byproducts. Amazon was forced to invest heavily in scaling dynamic websites as a byproduct of running a high-volume retail store, it invented a lot of internal tools to support that some of which they've adapted and spun-off into standalone products like AWS, EC2, S3, etc. In the process they've helped leverage themselves into more of a technology company than merely a web-store.
