There are natural monopolies that aren't strictly regulated. And there are industries that aren't natural monopolies that are strictly regulated.
The key is to examine the potential harm and the desired outcomes.
>Develop a superior algorithm and you're in the game.
That is entirely possible (or it might not be [1]). It doesn't change the fact that right now and for the foreseeable future, Google is the gatekeeper to the internet.
Right now Google directly controls the destiny of millions of people. One minor algorithm change can (and has) wiped out the fortunes of thousands of companies.
[1]Android market share could easily become high enough that Google could retain their monopoly even with inferior search technology.