The NSA doesn't need google to watch all of your internet traffic. They are already on the backbones. Google can certainly add value to the spooks with their search-related technologies but do you really think any US corporation isn't going to role over when the guys-in-black come calling? We allowed the Patriot Act, among other forfeitures of our civil rights, what did you expect?
So, google got big because they did it best. Isn't that what the market is supposed to do? They did it before there were high barriers to entry and when there actually was a little bit of free in that particular marketplace. Even now, when the barriers to entry to search are much higher, they are mostly technical barriers, not ones put up by lobbyists and lawyers. I can live with that. The next search engine should be one that comes up with something fundamentally new, not the one with the best patent portfolio.
What irritates me most is people who are complaining about privacy who won't take any responsibility for protecting it. You can't expect privacy on the internet even if you don't use google. If you want privacy, start using encryption. There are free and open tools for every platform. Worried about traffic analysis? Wow, you must be doing something really interesting with your pron collection but, stil, there are tools for you to use to mask you traffic. Use them.
Use the time spent complaining about your loss of privacy and take it back. Make a personal threat model and respond to it.