I think more than 95% of Google's revenue comes from paid search (AdWords and AdSense).
Google essentially did an end run. While others -- AOL, MSN, Yahoo, etc. -- were trying to become
"portals" to the Internet (which usually meant keeping you on their own site for as long as possible),
Google recognized that a simple search of the Internet was what most users wanted. That allowed them
to take advantage of a ridiculously simple interface, which many found superior to the portals'
hodgepodges. Google gets huge innovation credits for that, although it can be argued that appealing
paid search is their only successful commercial innovation to date.
Google ideas that you are touting -- such as Google Apps -- have been around for years
(they were formerly called ASPs... Application Service Providers).
