Interesting thought: What if the reason that Google is unable to find a second source of revenue outside of advertising, is the size and importance of the ad revenue itself and the effect it has on the organization?
Yes, that's precisely my point. There's no incentive (no hunger) to build up a product into something mature and heavily profitable because of the ad revenue trough. And there's no consequences for failure or missteps for the same reason. This leads to a fundamental lack of seriousness in developing products and customer relationships, which stunts google's development compared to what it could be.
Otherwise known as the falling into a moneypit and suffocating problem.