What is Google afraid of?
I've explained it elsewhere (
this post - and I maybe wrong, that is my understanding of how some of it works), but they are very afraid (and rightfully so) that certain data could reveal how their systems work - systems that they have spent God knows how many millions on. Basically, once the government got its hands on the data, some third party, perhaps a government contractor, would have access to that, and the next thing you know, their competition knows how they do what they do.
They also don't want to open the door to the government going farther and farther down a very steep hill, namely "this time it's a weeks worth of searches and one million random websites, next time it's a month's worth of searches, two million random websites, and the IPs of the people doing the searches".
The government would and could turn them into the proverbial massive database that tries to track a lot of things about a lot of people.
Right now, the information Google collects (information that any website can collect, really), helps them to load-balance their massive data centers, and it helps them to sell lots of advertising -
https://adwords.google.com/ explains what I'm talking about - Google can tell advertisers how many people would be interested in their products based on various search terms, etc. - that's the simplified version. Let's just say that if you have a product to sell, you can easily find an audience at the least cost to you, through what Google has done, and if you want to run advertising on your site, Google also makes it incredibly easy to do that, and can help you to generate the most revenue - there are many sites on the internet (including quite a few big-name Conservative sites) that would not be able to afford staying online if it weren't for such programs.
Google has a very nice (and big) email and instant messenging service as well.
Google may think, and rightfullly so, that if the government is successful in this case, they may to try to expand their next request to include "one million emails" - crazy? Not at all, look at what TIA was going to originally be.
Google has much to fear on so many levels, it's not even funny. I'm not surprised about the others - Yahoo, especially, has no problem helping the government against thought crimes, I mean political dissent, I mean treason, or is that "we are just complying with certain law enforcement standards around the world".