It's reportedly 5GB but then if you did some basic research besides just copying and pasting the first article you came across you'd know this. Dropbox is only 2GB for starting so this puts Google ahead.

Obviously Google will have more storage than 1GB and to think not is foolish. This is one of the ways they won the email war with Gmail back 8-10 years ago with massive storage and how they will try the same again. Last time it was Microsoft, Yahoo, AOL etc who all had email. This time it's Microsoft (sky drive), Amazon, Dropbox and Box etc. It's the same thing all over again. If Google arrive and offer a better service because of all the money they have to throw at it they can easily become the best.

Online file storage is perfect for Google. It's an engineering problem just like Youtube. How do you store large amounts of data and let people access it everywhere fast. It doesn't have to be something social (which Google is poor at) or have a super interface like what Apple could do or engage with the music or film industry to gain access rights (like what iTunes, Netflix and Amazons LoveFile do). It's storing files. Now think Android and Chrome intergration and the one privacy policy they just added. Simple.