Google has got to be paying Amazon for the traffic. Whew! That's aggressive.
Of course, USA Today is advertising its new travel pages on Yahoo. And the New York Times is offering home delivery--on the Atlanta newspaper web site.
So, Google has penciled this out and figured that we pay x to Amazon and we'll make x+y overall from the traffic.
Let's face it, Google gets paid for clicks. No traffic, no clicks. More traffic, more clicks. And, if they can make this work in this ad market and low prices, then that's great.
But, I do not think this is paying now. Google is unique in their patience. They are going after market share; they want everyone else to be secondary when it comes to buying ads on search.
The "first mover" thinking got scoffed at during the dot-com burst, but there something to it.