Protocol buffers are Google's language-neutral, platform-neutral mechanism for serializing structured data. They allow services to communicate efficiently and are used across Google's services. The company's strategy involves using protocol buffers to allow Services A and B to communicate with each other and share data in the data lake and Redshift database through a common protocol buffer definition and serialization format. Code generation from protocol buffer definitions allows different platforms like mobile, backend services, and data engineering stacks to work with the same data format.