Apple is Building a Social Network Right Under Our Noses

To an extent, I agree with the OP, especially on the note of who is the customer.

Google very much uses people as their products and their customers are advertisers. Their goal is to turn every single person that uses a Google product into marketable data that is monetized in turn. They want to make good products you'll use, but it is rather obvious they are designed not for a smooth, slick UX; they are designed to keep you using them so they can gather data. I use Gmail - swear by it - but open up Sparrow on Mac and see the difference in how the entire thing is laid out?

I'm very familiar with this because of the rather large amount of money I spend on Google ads (both my own money and client's money). You see, with Google paid search ads, you bid on intent: "auto insurance quote" means you're pretty damn sure you will get someone who wants a quote on auto insurance. Your ROI will be high and the CPC will also be high because of how profitable the term is. Google has mastered monetizing search with these ads; they lead and Bing follows. More power to them!

Facebook has done something quite interesting though; they make you bid on people and their interests. Instead of bidding on intent, you bid on what they like and respond to. Instead of inserting an ad that should provide content about what they are searching for right now, you are bidding on being a part of their Facebook experience.

This is why Zynga, Playdom, Playfish, Kabam, et al have succeeded so well. They have integrated their product into the Facebook experience - a platform, if you will - that caught Google entirely by surprise.

This platform is extremely profitable if you know how to make it work. I make over 3x the EPC (earnings-per-click) on Facebook than Google.

What FB has done so well is make the consumer not the product; you bid on their life and being a part of it. Everything you advertise on FB is something you want people to be interested in and interact with, a totally different paradigm shift from search. So despite the notion that you are bidding on people, the important thing is the product is connecting with them.

You can see why Facebook is something Google fears very much, and why the G+ response had to be perfect.