They have not figured out how to diversify (in any way that makes the company safe from a decline in search ads), thats their failing, they make boatloads of money.
would it make you happy if their search business was originally 20 billion? That would make things more diversified.
Google's problem is that they're terrible product designers and they never truly focus on a product the way other companies do. Are you genuinely delighted by any Google product these days? I'm having a hard time thinking what they create that even could be delightful (that regular consumers can buy, anyway).
I like Google Search, it is good, plain and simple. Regarding any of their other products: for sure no. Gmail works but creeps me out and as an admin, relying on GApps is becoming an increasingly not-fun experience since they rewrite the UI on a biweekly basis while leaving their documentation outdated. Boring and agonizing to have to spent time on something that is essentially easy except for the fact that the settings are hidden in an ever shifting castle of (pixel)sand.
Android for me suffers from the same product instability issues, I much much prefer the potential openness of Android to IOS but I certainly do NOT prefer the overt way Google monetizes their users and after fighting with mediocre Android hardware I've ended up with iphone. Low and behold it works, like, plain and simple style.
Google has the resources, but the focus?!