It remains to be proved that an university is particularly better at innovation that anything else. At least in Computer Science most major historic breakthroughs happened in army departments and in commercial laboratories (Bell Labs, Xerox Parc) and today they are still strong, for example many of the most cited CS publications come from Microsoft Research. Google faces some of the biggest challenges in Machine Learning and has some of the brightest people in the field, I doubt they will be looking for "ways of making people click on an ad". The advantage of a commercial or military laboratory is the constant flow of new problems needing to be solved that can give everyone huge visible benefits, it is emotionally stimulating, in comparison to the somewhat vacuous atmosphere of an universities thinking for thinkings sake.
This includes textbooks ("Handbook of Applied Cryptography", "Reinforcement learning: an introduction") and introductory articles ("A tutorial on hidden Markov models"). Also, ironically, paper 11 in "Academia" is about Google.
Anyway, there are strong incentives at the university to produce papers, to the point of this being one of the top priorities for every university worker. So, I don't wonder the universities are the best at producing papers that are cited, I just wanted to emphasize that even in that area the industry has not bad contributions. There is also lots of innovation happening in the industry that is not published in the form of papers, since in many places there are no incentives to write up one after doing something of value.
I think you should reconsider your take on that paper 11. It's not "about" Google-- it is the cornerstone work that led to the creation of Google-- and it was written by two academics (PhD candidates at Stanford). In your previous post, you mentioned "the somewhat vacuous atmosphere of an universities[sic] thinking". But you need to step back and realize that this paper is showing that the university environment led to the creation of the key ideas behind Google, and thus I don't see justification to call it a "vacuous atmosphere".
In fact, I believe what Google is doing so well (and what is attracting great academic researchers like Hinton) is the creation of the rich and rewarding atmosphere mimicking that of classic academia. (And at the same time, cuts to education and research budgets are helping to erode the benefits of a life in the academy.)
Please don't have the impression that I am being condescending toward universities, I respect and admire a lot of work that is being done there, I just think that not all of innovation can happen there. Google uses a lot of theory, but they also act in the real world and face real-world problems that can inspire new research and new theories, whereas at an university you are to a large extent cut off from such stimulus.
