from Adwords, wouldn't it make sense for them to show bad organic rankings and good Adwords ads on each search results page? The idea would be to slowly push searchers toward the Adwords and forcing advertisers to pay up to remain relevant.
Of course then they slowly loose their user base because they don't return relevant results and then they have no one to click on the ads.
I was thinking along the same lined a couple of days ago. Since we got an adwords acoount for our company sites, our position has been steadily dropping each day ..... 1-2 positions every day. Before we got the account, it used to be stable or used to go up every day by 1-2 positions. This could of course very well be a coincidence. It would make a lot of sense for Google to push sites with Adwords accounts down and Adsense accounts up. So that Adsense sites get more traffic and hence, generate more revenue and Adwords sites get poor rankings and hence, continue advertising. I mean, if our sites were in the top spots (or even the top 10), we would probably close down out Adwords account, wouldn't we? Anyway, this was just a thought. Doing this won't be ethical and I am in no way suggesting that Google is actually doing it. Just making conversation!
I believe that Google tries to find a balance of highly relevant and "irrelevant" (for lack of a better word) results for search queries in hopes of: a) enticing surfers to click on paid ads b) frustrate web site owners so that pony up for PPC Their revenue management model is clearly to drive volume traffic on Adwords and Adsense. If their recent earnings report is any indication - it's working (for now). Overture/Yahoo, on the other hand, takes has a completely different revenue model. In the KW's that I track, they drive PPC dollars through higher maximum bids. It will be interesting to see which revenue model provides the best results over the long term. I think part of the answer will come from how MSN approaches PPC. Currently they are still serving Overture PPC. I would have to imagine that they will launch their own PPC service in the future including an Adsense-type program. If they do have an Adsense type program, what would happen if the user agreement for MSN prevented you from running Adsense on your site? I think the TOS from G also states that you cannot run any othe geo-targeted ad delivery systems if you run Adsense. This could get interesting!