Blogger is not a generic web site creator, it's more of a social phenomenon and it's one of Google's biggest products. So what does Google's new "features not products" initiative mean for Blogger?
The social features of Facebook are a natural direction for the Blogger juggernaut to start steering towards. However, if that happens, Blogger competes with Google's social networking service, Orkut, which has been gaining serious ground lately.
The Google Reader team was formed when two Blogger team members Jason Shellen and Chris Wetherell spun off to another building on campus and built a separate product. But reading blogs and writing blogs goes so well together in blogging community sites like LiveJournal and Xanga.
Here's an idea for Google: Merge the Reader and Blogger teams and products. Also, consider assigning employees Jeff Veen and Doug Bowman on overall visual look and feel detail of the newly combined offering to come up with something that's not too heavy UI wise but works and feels right.
Now you have a Blogger positioned firmly as a blogging community which is in the neighborhood of a social network but still different enough that it doesn't have to compete directly with Orkut. In fact, Orkut and Blogger can compliment one another—there's a nice integration opportunity with the unexplored Blogger Profiles feature.