onebuyone - 2:29 pm on Dec 1, 2011 (gmt 0)

In a nutshell. Why is it that Google don't apply their 'AI guesswork' and 'defining user intent' crud to the AdWords results? I wonder why, I wonder why...

If I was Google, I would do opposite. Use Google Adwords as source of data for machine learning algo, which will be used for organich search.
Every website is "earning" virtual money through backlinks, good usage metrics, low bounce rate, unique content etc. Each website have some set of pages and keywords, which they want to "advertise" in organic search and it's AI doing it for them. You can control priorities by your internal link structure, tell Google which pages and keywords are more important for you.

Panda-like site wide demotion is caused by reduction of this virtual budget for some reason. People have partially recovered from Panda thanks to deindexing many pages. It's like removing useless campaigns from AdWords, not spending your budget on them.

This may also be explanation to traffic shaping phenomenon.