It's very likely that Google's search CPC rates have been falling or stagnant for years. Given the size of search in the makeup of their ad revenue, you can hardly have falling CPC rates for 3.x years without search being partially responsible (at the absolute minimum, rates are stagnant in search).
People are overreacting to this. The drop in CPC is coming from getting MORE business in developing regions (which means lower cpcs & lower avg across the board). Certainly doesn't mean Google is making less money.
> We know most of Google’s growth is coming from outside North America, which means they are adding search volume but at a much cheaper auction than their established business. North America business is very strong and has seen CPC inflation for the desktop search — due to plateauing inventory and higher prices on things like PLAs.”
Parent comment is talking about the entire ecosystem - not the specific markets.
As new markets emerge, it's less competitive (in those markets) and then prices drop (which drop the avg).
In general, CPC doesn't mean much if you talk in total aggregate (you need to look at the specific markets) and CPC still doesn't address volume (which is the other half of the equation).
I'm guessing most of the people decrying the search ads are doing so from anecdotal evidence rather than statistics.
Do you have proof of this on a search level? On a display level, I'd agree with you, but anecdotal, things seems as competitive as ever in search.