It's step 1: embracing the open standard. They'll extend it next. Another commenter already pointed out that could be as easy as just using Bing to send revenue to them using Google's tech. They'll come up with other ideas.

Far as open-sourcing their stuff, I think they're holding off on that to preserve their profitable lock-in in legacy market. Harder to clone their key dependencies if the code isn't open. Even opening the data formats like for Office wasn't enough to make a copy that renders all existing documents perfectly. That was by design, too.

I think it makes more financial sense for them to keep existing stuff closed followed by Embrace with Microsoft-oriented Extend on open stuff. I doubt they'll Extinguish since they don't have enough clout to do that in this market. Probably in most markets now.