An article in Forbes this week summarizes the perceived decline of Technorati over recent weeks and months. Although I still value it as the best blog search engine, many techies disagree and have already defected to Google Blog Search. Meanwhile, almost 50% of Technorati's traffic is actually coming from Google (47% at the end of March 2007, says Hitwise).
As others pointed out many months ago, Google may decide that having Technorati search result pages within Google results offers no value, and drop them altogether.
Technorati's latest move was to turn itself into a multimedia hub, something that hasn't appealed to the tech elite (ironic, considering the company's name). Traffic is climbing, they say, but that won't continue if Google pulls the plug. Key staff have been leaving over the past few weeks.