Based on an excellent vision by pageoneresults in this thread "SEO is DEAD": [webmasterworld.com...]
I'd like to suggest one more discussion. I personally think PPC is dead. In any niche where you have more than a page-full of advertisers, bids have become obscenely high. The PPC providers (read G$$gle) isn't helping with their black-box, open check mentality.
Days of PPC are but over. It is Y2K all over again, hoping for a second and third purchase to take you over a red line.
We are DONE with PPC. Every single "we place you on a first page of Google" cold-calling firm is getting a message from me that they are fired, toast, history.
I don't think PPC is dead at all, in fact I think that in a lot of industries it is about to blossom. you're right that a lot of companies have been throwing money at it, and needing a second or third purchase to return a profit, but many companies are pulling back on that now, as they can't afford a loss leading marketing channel, so they're focussing on a realistic CPA and account optimisation, and in many cases I believe they are finding that they can generate a similar level of sales with a "clever" campaign, rather than a "money black hole" campaign.