RG is in a commodity industry. Lyrics are lyrics are lyrics no matter where you get them.
Yes, RG is better than most other providers. However, I suspect that the number of Google users that actually care about their differentiation (like annotations) is vanishingly small.
And even if, say, in Microsoft scenario they might benefited from using they monopoly position more than were penalized (can't for sure claim, because I don't know real numbers), it doesn't mean that companies should't not care about fairness. At the end of the day that is what competition suppose to do - force companies to think about fairness towards their customers.
So even if Rap Genius is not bringing revenue to Google, Google certainly can derive value from Rap Genius that contributes to revenue. However, since the effects are indirect, it's not easy (though not impossible) to put a monetary value on this relationship.
And if implicit or explicit risk protection (and back channeled information about potential upcoming risks) comes as a fringe benefit of direct investment, doesn't that "free insurance" allow Google Ventures to guarantee themselves more favorable investing terms?
I agree with you in theory, but in practice it sounds like you expect google to act as if they care about things like fairness. They are a company. The bottom line is what matters. If you think it's unfair, then try to hit the bottom line by using other services and convincing your friends and family to do the same