Microsoft was in a position to put Google entirely out of business at the time, and buy it for pennies on the dollar. Internet Explorer was THE dominant browser at the time with over 90 percent market share, and Microsoft was considering blocking the install of Google Toolbar (the vaguely malware-esque add-on Google paid Adobe to inject into Flash Player and Reader installers) and preventing Google from modifying the default search.
Google would not still exist without the antitrust lawsuit against Microsoft that scared them into playing it safe.
Also, Larry and Sergey's vision was an academic search engine that wasn't tainted by the mixed motivations of advertising[1]. Since they built the world's largest ad company, it's fair to say they sold out their vision and mission and the first opportunity for a lot of money.
Google would not still exist without the antitrust lawsuit against Microsoft that scared them into playing it safe.
Also, Larry and Sergey's vision was an academic search engine that wasn't tainted by the mixed motivations of advertising[1]. Since they built the world's largest ad company, it's fair to say they sold out their vision and mission and the first opportunity for a lot of money.
[1] http://infolab.stanford.edu/~backrub/google.html appendix A