$watch inside a service?

You can add any expression to the set of watches by injecting the $rootScope and using a function a first argument to the $watch method. Pseudo-code:

$rootScope.$watch(function() {
  return //value to be watched;
}, function watchCallback(newValue, oldValue) {
  //react on value change here
});

Don’t forget about the third, Boolean argument to the $watch method. You need to specify true if you want to deep-watch an entire object for changes.