When did the stumble occur?
It wasn't the day Microhoo was announced; nope it was before that when they migrated from their strength into other territories. Newspaper, radio and television advertising might be related to search or they might not be - doing an awareness campaign for a new category is a bit tough if people don't even know you exist. Those probes into the larger marketing arena haven't been nearly successful.
The recent bar codes for cell phones is another example of a forray of falling under the spell of the convergence sirens. It is presumed to be 'advertising' and everybody is worrying about that revenue pie. But is it? (Is it even necessary?) It is simply a form of cross-platform tagging that could take advantage of cell phone features, if we had them.
Reminds me: "If we had ham we could have ham and eggs; if we had eggs."
Google is known for search -- it is a verb, which is even better than being a noun or adjective (think scotch tape or formica). It should focus on improving that area since I still can't find what I'm looking for. Yes, the growth rate will slow. Yes, other firms will be experts in other areas. Yes, there's room for new kids on the screen.