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i was wondering about the change, too, but i didn't find this article interesting. in fact, talking about the icon at all isn't interesting. i was just startled by the new favicon and it took me a few google pages (maps, gmail, search) to drive home that, yes, these funny tabs were for google and all of google. i don't like it, but by now i'm used to it. i'll probably forget these ever had another icon by the end of today.
I bypassed most of the article, but as for the favicon, I think it's an improvement. The previous blue lower-case 'g' was just bad. This syncs with the colors of their logo, and is distinctive.
The interesting bit in the article is this:

"The new favicon is based on a design sent in by André Resende, a computer science undergraduate student at the University of Campinas in Brazil."

that's interesting because at first i kept thinking i'd opened tabs to some geographic region and that was their flag.
Difficult to say, but personally, I don't think the logo works that well. The most distinctive logos are usually made up of clearly defined lines with a very clear symmetrical shape, for example the Nazi Party or Mercedes Benz, or even the YCombinator logo.

The new google logo is okay, but it's a bit too mixed up.

I am not a designer, but I think the "g" in the new favicon doesn't look good.
The new google logo is AWFUL. You just can't effectively use negative space in a canvas that small. All I see is four coloured blobs and I have to mentally remind myself that it's Google.

Sure, I'll eventually get used to it, but it's so noncoherent - it shouldn't be a CHORE to get used to it, it should just STICK.

The rest of us can see it just fine. But I will say that the previous two favicons were much better.
Perhaps you can, but most folk I've spoken with have had to have it explained to them. Best answer so far: "Why would Google use a weird, bumpy, number eight in their logo? ...oh, I guess that's a 'g'."
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I thought the last one wasn't that great - looked fine on it's own.. However, it was very formal and completely out of sync with most of Google's other branding/style.
I predict that every time the favicon changes, the consensus will be that the change is bad. Then after a week, nobody cares any more. So what should Google do? Never change it, ever? I would recommend that the new favicon not be judged until you have had some more time to let it sink in. After all, if you do keep one favicon indefinitely, you will spend a lot more time familiar with it than you will surprised by it.
Was there this much fuss the last time they changed the favicon? Sheesh. Get over it already.
Yes, there was lots of fuss when they changed from the uppercase G in a box to the lowercase g.
A friend of mine agrees: Awful.

So why did the first capital 'G' favicon work? Simple - it's the first (large) letter on the search page!

Google seem to be trying hard not to become seen as a "tired" brand like many of those they supplanted. Mixing it up a bit is probably good for this.
Although the lower-case "G" is not easily discernible, the bright colors make it stand out more on my bookmarks toolbar, so I prefer it for that reason alone.
Gmail icon makes sense, it looks like mail. Next to that I have a G Docs icon which looks like some sort of painting and while it does stick out, it makes no sense whatsoever.
I find it distracting. The other one was much more discrete, which is better in my opinion.