According to The Chronicle of Higher Education, the University of California is in talks to join Google's Book Search project.
The University of California announced in October its participation in the Open Content Alliance, which will scan out-of-copyright material, a big difference from Google Book Search. Microsoft announced in June that it will use material from the OCA in its Microsoft Live Books Search, as reported by ZDNET. Microsoft also has a way for publishers to opt-in to contribute in-copyright works to its program. With the Google program, publishers must opt out.
See these previous posts for background.
MPC Publog: Google Book Search--the Fair Use Debate
MPC Publog: More on Google Scanning