The thing is, we're not making money from it in any way (which is why I call it a pseudo' startup), and because of that fair use can apply. Also, think about google. They scrape the entire web and profit by serving that as content...
Fair use certainly doesn't apply. You're using Google search technology (which btw, involves a bit more than 'scraping' the web) and stripping out the ads (their source of revenue). Expect a cease and desist letter soon.
Fair use doesn't apply, but if you can get your hands on an old API key it will still work. I built something similar (here: http://www.paulbutler.org/archives/endless-google-search/) and I just used an old Google API key, so I don't violate their TOS.
It makes me wonder though, since you can't make any money with it, how do you plan to pay for hosting fees? Surely you eventually intend to profit, what will you do then?
Correct me if I'm wrong, but isn't the API is limited to 1000 searches per day correct?
No, I don't plan on profiting from this. This is a very low impact system and I don't mind footing the bill for the hosting costs as long as it's of value to the community.