I generally disagree with Anil’s contention that it’s not a great fit. I believe there are many areas in which Google and Pyra are complementary.
My personal suspicion is that Google is looking at sites like Daypop, Popdex, and Blogdex and realizing that those sites, relying on the power of tens of thousands of editors, are working as well if not better than the news search engine Google has created. By buying Pyra Labs, Google can enhance its PageRank algorithms with some level of human interaction.
Going beyond the basic advantage in the search area, Google also is gaining a good tool to add to the Google Box and allow it entry in the overall corporate content management world. Why would anyone buy a box if it has search software only? How about if it has a full intranet solution on it?
While the acquisition does offer some level of centralization, I doubt it’s the only reason Google is doing it.