Googlysis (For a course, just thinking out loud)
Google's Strategy:Building a ecosystem of tools for a advertising platform. Retaining users on the basis of the user experience and ease of use. I think I ascribe to this view the most. I would personally like Google to become my virtual Jeeves if possible. Would willingly hand over all my information to them if they took "good" care of me. Which implies I need to believe their "Do no evil" philosophy.
Google's competitors:Let's define competitor. If we consider competitor as someone who does the same thing you do, then I agree with several of the suggestions that are given above (Yahoo, Apple). However, I think we need to look at a competitor as someone who can take revenue away from you, and by doing that possibly threaten your existence.
Looking at competitor in this perspective makes things a bit more interesting. Now Google's major revenues come from online advertising as many of you have pointed out and thus anyone who can take that revenue away from Google becomes a competitor.
So facebook which is an advertising platform, definitely is an immediate competitor, Apple is a competitor not because of iOS or iPhone, but because if iPhone owners never get exposed to Google advertising, Google loses revenue, hence android. But this competitor is more in the future than immediate.
Let's think further, if most of our online time was during our commute in our driverless cars, then Google needs to be there as well. So GM with their OnStar etc. become competitors (even more remote than Apple perhaps). Moving on, say I discover or launch a product that gets rid of people being on the internet at all (just imagining here), I would be Google's greatest competitor.
So now that we are thinking, let's keep going. Where do advertisers put their dollar. In earlier times they put it where they had the most eyeballs (think superbowl commercial), increasingly ROI of advertising is getting more sophisticated, particularly advertising on the internet, with click through rates etc. So if I discover some mechanism of making my way of advertising more effective than Google's, guess who is going to be Google's next acquisition? Me!
In summary, I don't think we should look at products and see who plays in the same space, we need to look at revenue and who can take that away from us. So facebook is a competitor but not for G+ but for the whole of Google. Apple is a competitor but not for Android, rather for the ecosystem.
Sustainable Competitive AdvantageI agree with the students who suggest that no competitive advantage is truly sustainable. If we consider an infinite amount of time, almost all competitive advantages get eroded. Thus the only sustainable competitive advantage is generating new competitive advantages every time your old ones are about to run out. :-)
Now let's look if Google has been doing that in the past. And we see that indeed it has. Search is nowhere finished as a competitive advantage and Google has started changing courses, while sticking to basics, it has come up with Google Now, Google glass, Android etc. Which of these become the source of competitive advantage in the future is not certain, but it has fingers in almost all the pies. One slip I think Google made was in their social networking platform and their mobile handset approach. FB and Apple have the potential to completely take it away from Google.
Google + simply does not have enough people to pose a serious challenge to facebook, and Android is not yet making a serious dent on Apple's fanbois. If these two platforms become universal, Google would have to become an also ran. I say this because in markets where number = revenue = more number, such as social networking or search and advertising, winner takes all, only leftovers are left for the rest. Things change VERY fast, as Nokia is realising.
Google does have a competitive advantage now, in that it is a very innovative company and its experiments bear fruit regularly, but the days of being able to do that sustainably are long gone. We never know if any company can possibly keep reinventing itself with the tides of time.
Concerns of privacy and SecurityI find the concern for privacy intriguing. Now I do understand that financial information and the like could result in identity fraud etc. and that would be disastrous. So let's make a distinction between "critical" and "noncritical" data. I would consider anything that does not risk my identity as being noncritical.
And quite frankly I don't care who has noncritical information about me. And if they provide me better services for getting that information (such as Google), I am overjoyed! As I said elsewhere, I would love a virtual Jeeves like only Google can be.
However using the lens of environmental analysis, I do think that increasing concerns about security and privacy are facts. Google has to look at this social change in its environment and do its best to address it. I have heard that some countries in Europe (Germany I think), have laws against even government getting access to data in servers hosted in that country. Google has a global footprint, if push comes to shove, it can move all its data in those data centres. True privacy would however come from some sort of escrow function, where personal/critical information about me is never stored, but rather hashed and a key is stored somewhere on Google's server and all noncritical information is then linked to this hashed key.
Quite frankly I have more trust on Google to come up with something like that than on any other internet company. Here's hoping Google doesn't screw up where it matters.