There is some (limited) potential for advertising on the google reader site itself, but I think the biggest two gains for google are user analysis and blog sear

There is some (limited) potential for advertising on the google reader site itself, but I think the biggest two gains for google are user analysis and blog search. Your OPML list gives google a pretty good indication of what your primary interests are, which they can use to deliver better targeted ads throughout the ecosystem. Google likely has fairly strong integration between blog search and reader; it's likely they'd be doing a fair amount of analysis and caching of this data in the first place, so why not build it into a full on service?