Google is effectively a monopoly, however the issue here is that they do not appear to be misusing their monopoly. Microsoft has been convicted of using illegal tactics to build and maintain their monopoly like licensing agreements that effectively shut competitors out of the OEM operating system business. Apple has been accused of abusing their monopoly by leveraging their position in music players into dominance in online music sales and then enchaining the two the way Microsoft enchained Office and Windows dominance.

What, exactly, have Google done to shut competitors out of the search business? What agreements have they forced on advertisers to discourage them from advertising with anyone else?

And while they ship other products that leverage their competence in search, they do not appear to enchain them. For example, they dominate in online search and have a strong position in online mail. And yes, they can leverage scale to sell advertising on both properties. However, their does not appear to be a link between the two products. For example, when I perform a web search it does not appear to use my mail inbox to influence the relevance rankings of online search.

So far, Google appears to be following a different strategic path than Microsoft did.

On the other hand, they effectively pay Mozilla to make Google search the Firefox default homepage. They also distribute a free mobile phone operating system that is heavily integrated with Google services. And they make a web browser (advertised on the main Google page of other web browsers) that incorporates features important to widespread adoption of Google applications (Gears, high performance layout and Javascript engines, robust process model).

Paying Mozilla to be the default search engine is merely using money from a successful business to promote the same successful business.

They also distribute a free mobile phone operating system that is heavily integrated with Google services.

You might have something there, that is very similar to some of the things Microsoft and Apple both do.

True. Google's monopoly comes from making an excellent product, not from using underhanded shenanigans.

Also, I'm not worried about "incentive to improve". Google is constantly improving and tweaking their search results. That's the only way they will be able to maintain their monopoly. Because, unlike a platform like Microsoft, there's very little inertia in switching over to a different search engine.