Again, on paper this is not a bad strategy. Many of the services you know today started out this way. They didn’t launch with pomp and circumstance, instead they started out small and were pushed by a small group of diehard early-adopters. Twitter, Foursquare, Instagram, even Facebook could fall into that category. It’s the same story over and over again. It doesn’t always work — but it has a much better chance than the massive launch route. And much less downside.
The problem that I have is that all of those launches were organic (or mostly organic). Naturally, employees of the companies were pushing their products, but at launch, all of them were small startups with just a few employees. The “Google Strategy” of making sure all employees push the products simply wouldn’t have meant much. Instead, they had to rely on the early adopters (some of whom were friends, but that too isn’t enough alone). And the natural progression from there.