Wired has an interesting theory on why Google bought Pyra. One thing though: why do they need to buy Pyra to use publicly available information? That is the heart of the issue. There are two reasons I see:

1. Pyra needed the money. They were tired of living on KD and having server problems. This deal gives Pyra some much needed breathing room.

2. Control. What better way to control what blogs look like than to buy up a blog factory? The funny thing is, RSS is already out there and public. Maybe Google wants a foothold on the inevitable RSS2.

Why not another blog company?

1. Pyra has software and hosting - an end to end solution that others, like MoveableType, don't have.
2. Blogger.com is well known on the Internet and has a killer domain name.
3. Blogger.com was one of the first blogging sites and probably has more blogs than their competitors.