On the one hand, saying Google Inc is an "advertising company" could be seen as trying to explain some hidden truth. On the other hand if we look at the big picture, applying the label "ad firm" to Google is not that helpful.

Newspapers got the majority of revenue from print ads and classifieds instead of subscriptions. Nevertheless, newspapers were seen in the business of "delivering news". Advertising was the enabler but it wasn't the newspapers' "core competency".

Television networks get most of their revenue from commercials. Nevertheless, they are seen as being in the business of delivering tv shows and movies. Yes, they are also a conduit for advertising but "advertising" isn't what the employees of NBC/ABC/CBS are actually good at.

Yes, in both cases, advertising is the major "revenue" that enables the businesses, but it's not what they actually do. Likewise, saying McDonald's is a "real estate company" can sometimes be an interesting business conversation but on balance, it's still more useful to everyone to say that they're in the business of selling food. They flip burgers much more often than they flip properties.

I think it's best to view Google Inc as a data information company. They are among the top-10 entities in the world to apply algorithms to petabytes of data. At the moment, advertising is a huge enabler of that activity but that shouldn't divert us from understanding what Google thinks they are actually good at.

There's a critical distinction between an advertising agency like Omnicom Inc (that uses technology) vs a tech firm like Google Inc (that uses advertising). Lumping them both together with the meme that "Google is an ad company" doesn't make much sense.

[1]http://en.wikipedia.org/wiki/Omnicom_Group