That is so, but the problem this causes is more than just customer confusion - it is a lack of integration and responsibility. There is no "let's polish this and see if it works based on real user feedback", but it's "let's throw this out and shut it down if it doesn't work".
And if it isn't shut down, it is left in that terrible half-documented state, with confusing integrations and terribly integrated into the rest of the product.
Considering I'm confused both as a customer, user and a shareholder, I'd say the tactic isn't working.
If they throw it out and it's great then they get accolades; if they throw it out and it's bad, they don't. If they polish it and see if it works based on real user feedback then they also don't but it took longer. Better to just throw everything at the wall the instant it has the potential to go viral and then move on if it doesn't.
Remember that Google operates at huge scale, so even something any other company would consider wildly successful (e.g. Reader) is a waste of resources for them. That means that if you're ramping up your product over the course of a year you're wasting time and money. Go big or go home.
And if it isn't shut down, it is left in that terrible half-documented state, with confusing integrations and terribly integrated into the rest of the product.
Considering I'm confused both as a customer, user and a shareholder, I'd say the tactic isn't working.