Ad blockers are probably an issue, but people blocking ads probably weren't clicking on many ads, either. Other theories might be the economy starting to dip (which would be reflected in trimming of marketing budgets) and competition.

Competition is interesting. In 2005, there were tons of online stores, and users found them through Google search. Nowadays, most brands seem to have an Amazon store. If a user wants to buy something, they'll just go straight to Amazon and bypass Google entirely.

As Amazon accumulates more stores and more buyers, Google is increasingly cut out of that search/purchase loop, and stores have less reason to buy Google ads at all.

To their credit, it's incredibly hard to come up with something that shows up as 20% when the whole pie is 100 billion. That just emphasize how successful their search ads not how undiversified they are.

would it make you happy if their search business was originally 20 billion? That would make things more diversified.

I actually think they have found tons of ways to diversify. Google Glass, Voice, and Wave could have been truly revolutionary if they had polished, simplified, and mass-marketed them properly.

Google's problem is that they're terrible product designers and they never truly focus on a product the way other companies do. Are you genuinely delighted by any Google product these days? I'm having a hard time thinking what they create that even could be delightful (that regular consumers can buy, anyway).