[bjterry]

I believe this is not a fully accurate picture, although the example you give in your second paragraph is definitely accurate.

At a high level you aren't allowed to use "material, non-public information" for investment purposes, but information isn't material just because you can make money off of it in some way, otherwise "channel checks" would be illegal. Material non-public information has to come from insiders of the company, so the only argument that could be made that it was illegal for Google to make investments is based on material information that was being provided to them, via search terms, by corporate insiders. If they are merely using the sentiment exposed by the public to them through search terms that is probably legal. Similarly it's legal for hedge funds to fly planes over department stores and count the cars in their parking lots to gauge the level of business they are seeing at Christmas time, even though this isn't public information.