Corporate spin-offs are very possible and are done frequently.

The problem here is that Google Code Search wasn't independently profitable, so it wouldn't make sense to sustain it as an independent company. (I presume it was created to build goodwill for Google as a whole among coders.) As to whether any of the related assets are valuable to, say, another company who thinks they can make code search profitable, I don't know. But if Google can sell those assets to such a company, it will.