lately, most of google's products have come out behind the curve, lacking polish and functionality, and then fail to gain traction and get killed off.
During my interviews at Google I asked a lot of questions, and the answers I got gave me a very scary view of how the place really works.
The search and ads teams work in a magical castle high in the clouds. Almost everything else in the company is considered a fun side project. You are not supposed to think about making money, or being successful. Don't worry about getting users either, that will come as a side effect of being a Google project.
10% of the company accounts for 97% of the revenues ($30+ billion/yr). When you are in the 90% of the company that generates the 3% "other" revenue, its easy to get your project killed, or your engineering staff reassigned, etc. A $100 million dollar a year business unit does not move the needle at all, so you can never be sure of your future.
I think the ad revenue is so high because it's the end goal of nearly every "fun" product.
The unfortunate part is that as a software developer it does not give me a confidence in the logevity of any google platform. I have a friend who was gearing up to use the platform and was testing out an idea that he was hoping to launch soon. I bet he won't be as confident taking dependency on Google platform the next time.