> If someone came up with a better search engine, Google would just buy it or hire the principals before they did.

Not really. The people with the better search engine might prefer to be 'the next Google' instead, and if they're not public yet its easy to not be bought. Just say no (even the VC's might prefer this as it could be a bigger later payout). If it was that easy to just buy anyone you wanted, Google would've owned Facebook quite awhile ago.