There are lots of ways to monetize free sites. See Kayak or TicketStumbler. There's also the freemium service.
The reality of ad blocking software (which is spreading quickly and won't stop until it's as ubiquitous as popup blocking is now) is that you'll have to find a better, more integrated business model at some point.
My hunch is that ad blocking is a huge threat to Google. So if they can control the browser space...
I still don't know why IE doesn't ship with ad blockers. Would it hurt them? Perhaps in the short run. But in the long run, it would do far more damage to G.
The reality of ad blocking software (which is spreading quickly and won't stop until it's as ubiquitous as popup blocking is now) is that you'll have to find a better, more integrated business model at some point.