I fully agree with you: “At best, an epsilon advantage”

Twitter is even faster, even more immediate. It collects what we’re doing and talking and thinking of doing right now. I’d love to see Varian et al take its data and put it through their algorithms.

At best, Twitter might have an epsilon advantage when a story breaks on Twitter (though I’m curious how often that actually happens). But, even in those case, I’m certain Google catches up extremely quickly, as people start searching on Google. And, even if the first mention of a story is on Twitter, that doesn’t mean that people will hear about it immediately. By the time the story propagates, Google may have already caught up.

Nonetheless, because Twitter is a public conversation, end users today are likely to see many stories on Twitter first. But that doesn’t mean that Google isn’t already in a position to know about them from analyzing their logs.

http://googleresearch.blogspot.com/2009/04/predicting-present-with-google-trends.html

Another point I should have made–you don’t have to be Google. Yahoo and Microsoft may have much smaller market shares, but their traffic volume is probably large enough to do a comparable job of tracking real-time trends.

Unfortunately for them, all of the money is in advertising, where Google certainly wins big on its market share. I imagine they also get higher winning bids from attracting more competing advertisers, but I don’t have any data on that.