Can I survive Google's shrinking SERP's?
No.. the days of small independents dining on the crumbs that fall from Google's table are over. It's been coming since Google became a listed company with shareholders. From that moment it became all about the money and any business model that gets between Google and the money was going to have a limited life at best. Penguin and Panda were the first of what will probably be many "restructing of influences"
Google's income from search is totally dependent on SERPs, not for the quality and accuracy of the rankings, but as necessary screen real estate to display/promote the things that make them money. Google Hotels is a recent example that gives them another big chunk of page 1 real estate.
The fact that there can't be any SERP's without using the intellectual property of website owners is, I suspect, going to become a very hotly debated topic (a class action would not surprise) as Google seemingly believes it has an entitlement to mould the internet to Wall Street's will.
As pointed out in earlier posts, when we strive for top rankings, we are really talking about a placement on page two at best. For most sites, that is never going to generate enough traffic to remain viable.