No, they could not "adapt". Ballmer's "one trick pony" comment is as true today as it was years ago. They derive the vast majority (90%+ iirc) of their revenue from ads. If ads are fucked, Google will be fucked too.
If ads are fucked, entire segments of the modern world economy are fucked.
The economy will be fine. Maybe even better than before. People will just figure out how to charge for content on the internet, and everyone will be all right.
I believe they now make a ton from Android, especially app sales. But regardless they could still adapt by adopting a subscription model for search, youtube, gmail, etc. Ads just happen to be the best way of monetizing those services today.
Not if others are willing to offer worse versions of those services for free. And Microsoft/Amazon are perfectly willing, since they're already getting paid for other things.