The Wall Street Journal is citing sources that say that Google is in “late-stage talks” with suppliers to build a watch, and could begin production “within months.” The watch would run Android (no surprise there) and be based around Google Now, the intelligent assistant that appears on some Android tablets.
Reliance on Google Now would require access to things like a user’s email and location, because Now draws on what Google knows about you to deliver information that it suspects you care about. In turn, that would mean the watch would require significant connectivity and, therefore, battery life.