I think the point Google is making is that ruba.com will be shut down and the team Mike assembled will be integrated into iGoogle and other teams. They will not be working on ruba.com any more.
Mike had assembled a world-class team, including former Googlers and Google wanted those people back working for them. It's the Google boomerang. :-)
An acquisition seems to be the logical outcome because if the team is going to be working at Google then that raises the question of what's going to happen to the ruba.com site. It doesn't seem plausible that the project would just be abandoned because I think it's reasonable for the owners to expect some compensation for the work they've done.
It's also a common strategy for someone in an organization to make a big vertical leap or move across the organization in a way that would be nearly impossible internally. Basically, an infrastructure engineer leaves and comes back as a VP of Product for social wizardry.
I wished people would use the word 'acquires' to describe those situations where a succesful start-up is bought by a larger company, not as a fig-leaf for dismembering a not-so-hot start-up or worse.
I feel like companies throw this around as a feelgood term to try and boost the esteem of the team after a liquidation.
For the founders it boosts their profile with one last feature on Techcrunch & in their resumes for the next job by touting "acquired by X" when in fact it was liquidated to X as a fire sale.
Considering that Ruba was identical in most ways to Nextstop I imagine its a weird turn of events for them. If they ever wanted to be acquired by Google they probably just lost that opportunity
http://techcrunch.com/2010/05/21/google-acquires-travel-guid...