GigaOM has an interesting post about Google's investment in 23andMe, and whether or not there a conflict of interest involved (or multiple conflicts of interest). The post does a nice job providing the details, but the ultra brief summary is that the co-founder of 23andMe is Sergey Brin's wife.
As you can see from the GigaOM comments (and using your own common sense!), the issue is open for debate about whether or not there's a real conflict here.
But from my perspective, that's beside the point.
If I were Google, I'd avoid this deal like the plague, if only because of the potential perception of a conflict. (Remember, this is the 'do no evil' company!) Even if this deal makes strategic sense (which it does), as the GigaOM piece points out, there were another of other similar companies Google could by where there'd be no potential for conflict.
Reputation needs to be treated as one of a company's top assets. Yes, even to the point of affecting corporate strategy. While it's easy to dismiss any negative "PR" Google might get around this as a drop in the bucket, it is yet another chink in the armor of a company that has reputation and PR to thank for its dominant market position.