Research shows that you can show people intentionally screwed up results, brand them as “google results”, and they’ll prefer them to real google results with swapped branding.

The amount you have to screw up the results to get people to prefer the real results is greater than the difference in performance of the major engines.

Conclusion? Search quality is a cost center at google at this point in the game — they have no economic incentive to improve it further.

Search isn't an alternative to advertising. It's what generates the advertising.

Is it though? They have sooo many sources of input, embedded ads everywhere, social buttons, gmail, calendar, documents, photos, android, blogger, youtube, google+, and probably others that IDK, that search is just one---and probably a less important one---of those. As a means to show ads, again, they have uncountable spots all around the internet that they can place ads, and many google apps that one might be using, that the search results page is again just a slice of a big pie.

Or maybe they figured that most people do very simple searches nearly all the time.

I know they earn a lot more from ads on google properties than on third party sites, you can see it in their financial docs. It's something like 80% of their revenue.

So we know embedded ads all around the internet aren't challenging it in any way.

That said I don't know what percentage of their "google property" ad revenue is youtube, gmail, etc. Maybe they're cash cows?

I'm inclined to think it's still mostly search though simply because it's the most valuable source of lead. One where the consumer has buying intent.

Searching for a new car Vs trying to watch a show and having a car shown to you before it.

I can't remember the last time I used a general purpose search engine with an intent to buy. The closest would be an intent to comparison shop, but then I'm explicitly searching for feature comparisons, not stores to buy from.