They used to do search well
Are you suggesting that they got worse? That someone else does search better? If you are, I disagree.
They have dabbled in many areas, and I agree that most of them are at best novelties. I think Google News is a great resource. Not surprisingly, it's search-related, but also automatically compiles top stories under various headings, which makes a nice news page. They also have blog search, which has been handy for me a time or two.
I think they'll do best in their niche of searching through vast amounts of information to find what the user wants. They've explored just about every available avenue in that genre (and some that weren't available, as authors of copyrighted works were quick to protest), but maybe they'll come up with other useful areas to apply those technologies to.
Caution: Contents may have been coded under pressure.