diberry - 4:32 pm on Apr 15, 2013 (gmt 0)
Adwords and Search may be two highly separated departments, but dollars to donuts there's someone higher up looking at the big picture - the results of the two departments' combined work - to make sure it serves Google's bottom line. It would be silly for Google not to do this, because then profits could fall and they wouldn't know why.
What IS debatable is how far this goes. The big picture team could just make sure nothing Search does could inadvertently hurt Adwords, which would be totally benign due diligence on their part. Or they could give the Search team directives which sound benign ("the lawyers are recommending we boost authoritative sites over relevancy, sorry") but are really designed to boost Adwords in a way that's unethical. Or anything in between. That's where we all have our own theories and, as Netmeg said, nobody's ever had their mind changed dramatically.
The reason most businesses fail is because they didn't look at the big picture, or didn't read it right. Google's success strongly indicates that no matter how they divide the workflow, or how they may keep departments on a "need to know" basis, someone there knows precisely how Adwords is looking on various queries, and they are issuing reports about it.
ETA: ...and I cross-posted with ColourOfSpring just as we said almost precisely the same thing. Jinx! :)