jmccormac - 5:58 am on Aug 14, 2012 (gmt 0)
The destruction, or at least demotion, of organic SERPs in favour of profitable SERPs is a nice conspiracy theory but with the emphasis on Google meeting stockmarket expectations, it is beginning to look like less of a conspiracy theory. But like all good conspiracy theories, it is as yet, unprovable.
The other possibility is that they have made so many modifications and tweaks to the core algorithm that they've broken the original innovation (Page Rank) that gave them an edge on almost every other search engine at the time. Like any other man-made system, it was inevitable that Page Rank was going to be exploited. As a result of this twiddling, the only thing that really seems to works well is Adwords and targeting. It is probably easier to make things work on a small scale than a large scale. Google's major initial advantage was that it was great at supplying answers. However the advent of Wikipedia has probably taken that section of the market away from Google as a generation of schoolkids are growing up using Wikipedia as their reference rather than Google.
The way that Google has been aggressively targeting competitors in local search and advertising is an indication of how much they value this market - it is probably one more market where they can be defeated (Facebook/Twitter etc have already defeated Google in Social Media).
The other aspect is that the balance of search has probably shifted towards a more localised search with less global/general searching. Google had been good at general searching but localised search requires localised knowledge to be effective. Some sites that have seen traffic reduced might be generalist type sites rather than local sites.