The days when you can come in with some new idea and change everything are gone. It's a much more sophisticated set of problems than can be done with a small team coming up with a new development.Instead, he says that disruptive ideas will focus on a smaller part of the system, e.g. a new important ranking feature that will be assimilated into the massive behometh of a system. One example of this that comes to mind is Sep Kamvar's work on personalized Pagerank at Kaltix that Google acquired in 2003 and has now integrated.
As Eric also mentions in the interview, a key obstacle to web search innovators is scale. In economics terms the market has a large barrier to entry.
Despite the barriers, I think he is wrong. There are still disruptive innovations left in search.
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