I've recently begun thinking that Google can't, in fact, improve their search results. They've forced the algorithmic landscape of available data onto a local optima because of seo and financial incentives. The only way they could improve results would be the cooperation of all players - website owners would have to agree to not try to game the algorithm, which will never happen. Everything is so oriented around gaming the Google algorithms that the game is deadlocked.
There's a clear opportunity right now for an awesome search engine to usurp Google's throne. Bing and Microsoft are too conservative to be a serious threat, but would happily acquire an engine better then Google. Nobody wants to be David on purpose when Goliath is a terrifyingly huge and scary as Google, but I think it's gonna happen soon.