Comment by acqq

The spies tap the side where there's no encryption. SSL encryption is by Google's design removed by Google at the point marked with the smiley face.

The trick is that Google has to move a lot of data between their own servers on the different locations (even different continents) and that traffic is not encrypted. That's why "Two engineers with close ties to Google exploded in profanity when they saw the drawing." It was that easy.