To put it in a nutshell, most Labs experiments will see the end here, while others will incorporate Labs products and technologies into a variety of product areas. Apart from that, many other Labs products have ended up as Android apps, and will continue to exist there on the Android Market.
This does not mean innovation will end with Google, but this is just a closure at this point in time. There aren’t plans to change in-product experimentation channels such as Gmail Labs or Maps Labs at the moment, so do expect new features to continue rolling out in such products! Things suddenly don’t sound too bad, right?