I was going to call this "Year end round up" but I'm 2 months late. And there were far more important things going on last year.
Google jumped the shark.
It was the year they declared war on your private life. Here is a great quote from Google CEO Eric Schmidt "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place." It is extremely startling that a man as smart as him doesn't realise everything that is wrong with that statement. Remember, this from a company who's mission statement used to be "Don't do evil." Of course, Schmidt is a rich straight male of european descent and has profited handsomely from that Invisible Knapsack he has.
And of course they chose the wrong side of the Nym Wars.
But for me, the real signal that Google No Longer Gets It was that they pulled the plug on Google Wave. This was the most exciting thing I've seen since... well since the web was won, I guess. Take email, IRC, Wikis and online forums. Remove all the elements of those that make them annoying. Then add in RSS feeds, images, spreadsheets, version control, real time simultaneous editing and more. Take AJAX, Comet and all that, then make something helluva useful out of it.