Now they are over $4B/year buying traffic, its pretty crazy.
Search needs to be fast. When you click search you want the page to then pop up with your 10 blue links. The physics of light suggest that your index files all need to be close together, both physically and with high bandwidth to support a couple of round trips for distributing the query and returning the results.
While I learned how search worked while I worked at Google, it was a brilliant engineer named Keith Peterson at Blekko (now at Google :-) who taught me some of the more subtle issues involved in balancing indexes, shards, and query processing in order to maximize utilization.
That requirement of closeness and high bandwidth, makes federation hard. Even forwarding a search to Bing (via the Yahoo APIs) to check for additional "long tail" results really challenges your ability to deliver fast results.
Unlike CMSes where they could run independently in parallel, search is a 'talk to everyone all the time' sort of problem, you don't know apriori which indices may have relevant documents (which is why it is called "search" ;-))
And if you revoke any permission to any Google apps, all of them will refuse to do shit, and you can’t even place calls without giving Google access to your location, body sensors, bluetooth, etc.