One of Google's blogs has a very interesting post called "Google is All About Large Amounts of Data". The blog post talks about how Google is using their access to large datasets to improve search and speech recognition software. Key quote:
"As we get more data from more interaction with users and from uploaded videos, our systems will improve because the data trains the algorithms over time."
Basically what they are saying is the more data the better the results. Better results means more usage, which leads to more data. This is a classic example of economic concept of increasing returns to scale, and is a key reason Google continues to gain share in advertising, search and other areas.
Scale used to require physical assets in the form of manufacturing plants and equipment. In the online world scale is about the ability to collect, analyze and mine data. This is as true for small businesses as Google.