Directed Edge is a lot higher-level than this, and more focused on making it easy for their users to make good recommendation engines. Prediction API is focused on more general tasks, and for that reason I predict that it'll have trouble competing with Directed Edge. Unless some startup comes along and competes with Directed Edge using Prediction API as a back-end -- but we can talk about that later, if it ever happens.

Prediction API is a nice broad tool, but Directed Edge still has a big advantage in their niche.

Not too concerned at this stage. We'll see how well the Prediction API will actually work in the wild for product and content recommendations. Beyond that, I'm not sure whether Google will excel in ease-of-use and support.