So far, the so called "smartwatches" haven't been a very successful product category. Most people don't wear a watch anymore, and it's hard to make them comeback to them, when the benefits they offer over a smartphone don't seem to outweigh the $200-$300 prices they ask for them.
But what about a Google Now watch? Google Now is unlike anything we've seen so far. Sure, we've had Google Voice Search for many years, and then Apple bought Siri and integrated it into iOS, and improved a little more on what Google Voice Search could do, by taking commands to change stuff inside the smartphone, or reply with funny comments. But we've never had a service that helps you in a way a personal assistant is really supposed to help you - by letting you know about stuff when you need it, before you even have to ask or think about it. That's what a good personal assistant is, and Google Now is exactly that.
We already have Google Now on smartphones, but I don't think a lot of people know about it or use it, in part because other than Nexus devices and Motorola's devices, other OEM's tend to hide Google's apps as much as possible. Plus, to use Google Now, you have to take it out of your pocket, and there may be more opportunities for information to be given to you on the spot, in the future, than we have now.
Something like a Google Now-powered smartwatch could give you a lot of real-time information wherever you go, so you'd be missing out on a lot of that information if you had to take the phone out of your pocket every time. Instead, you could just look over to your wrist, and see the helpful information that's being given to you.
But while Google Now would be a killer feature of any smartwatch, that doesn't mean that's all a smartwatch needs to succeed. Google needs to make sure the design of the watch is very fashionable, too, because a lot of people buy watches (especially expensive ones) for that reason alone. This aspect must not be overlooked, and the design of the smartwatch needs to be a main priority for Google's hardware team.
Battery life is obviously important, too. It should last at the very least a day - for heavy users. It shouldn't be like with smartphones where a "day" basically means 8-10 hours of battery life, with "moderate use". It needs to last a day even with people who use it all the time. For that, they may need to use a display technology like Qualcomm's Mirasol, which may not have the richest and most saturated colors like OLED screens (which don't look that great in daylight anyway), but you won't be watching videos on the smartwatch anyway.
So something basic that lasts several days, and looks great in daylight, too, would be preferable over a display that makes the watch last a day at most, and only looks great inside. Google has already partnered multiple times with Qualcomm so far, so maybe Qualcomm has been pitching Mirasol to them already.
The Google smartwatch is rumored to be announced in a few months, possibly even this year, so we'll see then if Google got it right with the smartwatch or not.