But who gets the advertising revenue isn't the relevant policy concern. The government shouldn't care whether Google gets that revenue or someone else. The relevant policy concerns are what level of privacy protections do people want, and what practical choices do people have to protect their privacy. There is so little competition in either the market for ISPs or the market for search services that it doesn't make sense to leave privacy up to market mechanisms in either case.
Google has evolved far beyond just showing you an ad in response to a search. It tracks you throughout the Internet, leveraging its massive affiliate network. It's the default search engine on both mobile platforms. It's got more than 50% browser market share. Even if you don't go to Google.com or gmail.com, it's nearly impossible to avoid emailing someone with a gmail address, texting someone with an Android phone, visiting a Google affiliate website, etc. Pointing to the possibility of using Google alternatives is as ridiculous and self serving as pointing to satellite as broadband competition.