Thanks for the good points Chiyo, but I believe I can counter them all. :) In a court of law I wouldn't even need to completely counter them either, only create a reasonable doubt.
The system allows for this perfectly by providing a 'backfill', usually from Inktomi. The fewer bidders the sooner the 'ordinary' (not PPC) listings appear. However, I would generally agree that Goto is best when looking for commercial stuff, just as Google is best when looking for popular and established sites, and NorthernLight is best for researchers, etc. Many engines are best suited for a particular type of search and not so good beyond that focus. That's a good thing - we call it 'niche marketing' I believe. :)
Looking on almost any search engine I see the ones that use optimisation higher than those that don't as an almost universal rule. On Goto at least they make the criteria for rank very clear allowing everyone to know exactly how to boost their ranking. We SEOs know how to boost ranking on ALL engines, but how many newcomers to ecommerce do?
Much of the reason for this is not to 'hide advertising' (I've already disputed that PPC listings, subject to human editor approval, are fully advertising) but because many end consumers (searchers) do not see the benefits of PPC and are prejudiced against paid listings, full stop.
The SEs therefore are attempting not to discredit the results from user prejudice (unfair prejudice for reasons stated in my prior post) and instead simply provide them with the most relevant results.
If there were not so many who think all PPC is 'bad' and totally commercial (failing to understand that PPC is the only ranking method that does make the sites financially responsible for any misrepresentation) then I don't think any SE would fail to make a big point of it. However, I fully agree that the SEs should educate the foolish rather than try to hide the facts from bigotry.
Well, personally I see Yahoo losing ground to MSN and AOL ... :)
Thanks for the interesting points, perhaps my own counter-points will show the other side to some of them.