Scales of Google Influence

I'm a big fan of Google. As I've watched SEO turn into "optimize for Google" I've noted two key things:

1. Google forces sites to have better content. This makes the web better, Google benefits by organizing said improved content better. A net gain for Google.
   
2. Sites have figured out how to play the Google PageRank game, Google loses because its metric is tainted (a link is no longer an indicator of value). A net loss for Google.
   

In other words, there are two ecosystem forces at work here, one benefiting Google, one hurting it. Who will win???

SEO experts have gamed the Google PageRank system, to the extent there is a market for links on a web page. Once that happened, the backlink metric no longer became an indicator of content value. I submit Google has to figure out a new "GPR" algorithm. They need to innovate. What worked 10 years ago is no longer as effective as it once was. They risk being disrupted, just as they disrupted AltaVista, Excite, and Webcrawler (wow, how many readers have even heard of those search engines???).

Or, perhaps that is why they are expanding their product offerings? Are they trying to get in a different game? I like Google Apps. It shows Google is capable of productizing away from their core. The catch is - can they market and brand away from their core? They can with me :)