Trademark dilution is something that happens when you use my “famous” trademark in a way that, while not necessarily threatening likelihood of confusion — because everyone knows Microsoft doesn’t make skateboards or Coke doesn’t make hunting rifles — does threaten to “dilute” or lessen the ability of my trademark to denote a single source in general. Since to qualify for (federal) trademark dilution protection my mark has to be famous (and registered), the thinking is that I’ve kind of “earned the right” to own the whole universe of possibilities for goods and services utilizing my mark.
There are two ways to show dilution; either one will do. One is by showing blurring — the existence of an association arising from the similarity between my famous mark another famous trademark that impairs the distinctiveness of my mark. The other is tarnishment: You’ve caused my famous mark to be “tarnished” by association with not-nice things, or, I would argue, things otherwise inappropriate to my brand equity.
All that is by way of saying, Whom do you sue when you plant the seeds to tarnish your own brand? (Hint: The answer is not Google.)
UPDATE: Nothing sweeter than watching some companies dilute their own trademarks!