>That's actually as much, or more, of an argument for better ads as it is for "worse" content.
That's certainly a healthy way to look at it, but google is still competing with itself internally, which I think is rather different from competing with an external company.
>Competition is generally considered good,
There are two ways of competing; making your product [appear] better, and making the other guy's product [appear] worse. The difference between external and internal competition is that with external competition, you have the option of trying to make your competitor's product appear to be worse, but it's pretty difficult to actually make it worse. With competition within a company? It's much easier to actually make the competing product worse. (Note, I'm not saying that google is doing that... just that competition between departments within a company is often not as beneficial as competition between companies with different ownership.)
>I see competition all around here.
Well, first, I am glad that you (as a googler) see competition, but my view, as an outsider? you don't have serious competition. I mean, as a business owner (and someone who buys ads) your competition is... meat-space ads, mostly. And relationships with sites your customers care about. (Sponsorship and the like, which is higher labor, but I think often gives higher value to the advertiser than display ads. I'm not sure it's an approach that scales.)
As a consumer, I don't see serious competition for low-cost email. I don't see serious competition for search. You have a big lead, in most of your consumer products.
Obviously, Google doesn't have a lead at all in social networking, and, I think, google shifting so much of their emphasis to that market is a symptom of not having serious competition in other markets. (I believe, well... I hope that the social networking market is not as big or as important as the market right now thinks it is.)
>If Google can make search results 10x better, I'm sure they can figure out how to monetize it.
There's a difference between "oh, that would be nice" and "we must do this or we will no longer exist as a company (or lose significant market share.)"
I can tell you this from recent personal experience. Two years ago, increasing ram and disk allocations for my customers "would be nice" - and I started moving on it. some customers got upgraded, but not many.
Today? it's an existential problem. I've lost 15% of my customers in just a few months. If I don't get users upgraded (and open new signups) with dramatically more resources per dollar soon...
So yeah; Consider me motivated. Between my previous post and this post, I caused nearly a terabyte in ram (and servers to put said ram in) to appear in my van.
(I know that the motivations of public companies are... different. But generally, this is the narrative that is used to explain why competition is good, even if this narrative does not always fit the data.)