I have a feeling that google search suggestion has helped increase the use of longer keyphrases which are more specific. Because a layman user, who might be slow in typing, or not able to think of proper and complete the phrase, just has to chose from the options when he starts typing. I have noticed that almost 50% time i select from the search suggestion. What is your opinion about it? In the longer term, will it increase the ratio of 3-4 word phrases to 1-2 word phrases in most trades?
I haven't seen any data that lines up with your idea - although it does sound like a possibility. Some of what I have seen showed a slight decrease in the average length of a search phrase on Google for Q4 of 2009 - although not by very much.
One possibility for the slight downward trend is the rise of mobile use, which makes more typing less likely. Another possible explanation is a flaw in the study methodology. There would be many pitfalls, for example how does any study score full URLs that are typed or pasted into the search box? Each dot, forward slash or colon could be counted as a word separator.
Up until Q4 the length seemed to be growing a little bit every quarter, and most recent data studies show an average search term of just below three words.
As I think about it, that average of right around 3 words means a lot of search phrases that are 4, 5 and 6 words long, and Google Search Suggestions might work against those much longer searches, too, even as they increase the 2 and 3 word length.
One effect that is almost certain is that queries will tend to be more homogenized (ie similar). WIthout "suggest" people will normally tend to phrase queries a little differently and include typos, errors, etc.
When they have the option of just selecting a "will do" phrase from a list, convenience wins.