As a company whose revenue is based on data-mining internet traffic, it makes perfect sense because of the potential value of pushing ads to an individual based on knowledge of their social network, e.g. pushing Mercedes ads to a person whose friends all drive Porsches. And for Google, that's what better search means - it doesn't mean putting useful long tail information on the front page when such information is not easily monetized.
That's a small demographic, in my opinion.
The bigger pie are the people who are actively seeking out information about Mercedes via search.
But if I'm searching less because it sucks, then that's a big problem.
Google is a search company. I hope it doesn't lose sight of that.
Improved browser speed and increased bandwidth means that you can perform more searches in a given time. Degraded search results mean that you will do so, and thereby generate more advertising impressions and hence more potential for revenue. Or to put it another way, anyone ever becomes so frustrated with the Google Search's results that they clicked on a sponsored link or other ad to see if that's what they wanted?
Companies pay a lot to get people that don't know about their products to be aware and interested in them. The other side is actually the smaller market.
Search isn't going away. It's here to stay. Will search become social? I tend to think it won't. But if it does, I think it'll only be a small component and it'll occur in niches. For instance, searching for a movie on Netflix based on what your friends like/recommend may become more common. Though, searching for a pair of new shoes online won't be a social activity. I like what I like.
But Google should worry most about search. Google.com. Searching on Google has gotten worse and worse for me over the past 2 - 3 years. To find what I want (if I find it at all), I have to try several queries and comb through several pages. This is time-consuming and my solution has been to just search less.
Google needs to stop worrying about what others are doing and focus on Google.
Make search better. Once you've done that, keep making it better.
I know Google wants to build new things, etc., but it shouldn't be social.
Edit: (1) I could be totally wrong about this. (2) I think of Google going after social meaning it wants to build something that replaces Twitter, Facebook, Myspace, etc. Perhaps its social strategy is different than that.