According to Android Police Google and Motorola are indeed working on their own smartwatch, posting images that reportedly show the device for the first time.
According to the site, the watch features a rubber band and a capacitive touch screen and is something that has been under work internally at Google, reportedly carrying the name “Google Watch”, which could mean that despite it being something that Motorola also worked on, the project is still a part of Google, and is likely one of the many things Google kept for itself after its sellout of the company to Lenovo.
According to Android Police the device in the photos features 3 bit mode applications, fitness modes and voice commands, all of which is powered by Android, and will likely use the Google Now service.
Of course its likely that the photos simply show a prototype, and is likely to change heavily when it is finally revealed to the public.
Source: Android Police