"Google is now adding about 500 workers each month"
Hmm...500 people. By my calculus, 500 people should be able to implement about 100 business concepts every 1-3 years. That seems off somehow, but...well, they can't all be system admins, can they?
...but I don't really see the revenue stream. What are they doing with all of those people except mocking up start-up environments and hoping for the occasional big hit? Wouldn't it be cheaper to just let the free market work, and buy other people's companies as needed?
How much work is it to maintain the world's best search engine? Think about not only the algorithm/ranking problems, but also performance and systems problems. Google recently (2 weeks ago) completed a complete overhaul of it's backend - this took 2 years! Yet most users won't notice a difference between Google today and Google from 1 month ago.
So your "calculus" is wrong, search is a tough problem and Google has a ton of work to do just with its core product. In fact, they claim that 70% of it's resources are spent on just its core search and advertising businesses.
As for Google Labs, I'm sure everything Google releases has some goal to eventually add to the bottom line (If not directly then through increased customer loyalty or technology sharing).
Let's not forget that while Google's employee base has been doubling every year,so have it's revenues so something is working.
I am grown up. Thanks. If you read the spec for web accelerator, you will see that it will allow google to know exactly what you are looking at at all times. This fits the definition of the word "Orwellian" as I used it.
Man, I can't wait for the day when google stops being untouchable.
I'm tired to read this sentence again and again. The Google culture from the outside is disturbing.