Microsoft's Virtual Earth is certainly a slick piece of mapping tech, and it has clearly been built with a commercial strategy in mind insofar as it is already full of ads (Adverlab).
But I'm not persuaded that it's main purpose is as a Google Earth killer. This is a World of Warcraft killer, a PSP killer and a Second Life killer rolled into one - the first incarnation of the ultimate, persistent, virtual gameworld that Microsoft will lay over the corporeal world. The signs of Microsoft's gameplan have been evident for a while, with its unique combination of gaming assets mobilised as Live Anywhere (News.com), the revamp of its now unmatched virtual earth software and its purchase of in-game ad expertise (ArsTechnica).
"What's next?" asks O'Reilly's Brady Forrest. Next, as I've commented before, is the creation of multi-platform locative games within persistent gameworlds (note the plural) that overlay and interact with the corporeal world. World of Warcraft meets MySpace meets PacManhattan meets...oh, Halo or Perfect Dark. There is space for one, and probably only one, "official" virtual world platform for homo ludens to create game layers upon (see e.g. Ren Reynolds at Terra Nova for why here and here) and Microsoft's lead in being the provider of that one platform just keeps growing.