econman - 11:16 am on May 22, 2007 (gmt 0)

My intuition is that they are trying to stamp out a business that offers very high CTRs but a corresponding poor user experience. Logically, the adWords Quality Score mechanism would not necessarily solve the problem -- their high CTRs would make it very difficult to weed out using a pure auction type mechanism -- without imposing excessive collateral damage.

There are two basic reasons for high CTRs. One is that the site provides users with little or nothing else to read or do besides click on one of the ads. The other is that the site offers alignment of content and advertising. After the users has read all about widgets they get excited and want to buy one, so they click on an ad).

Perhaps the statistical fingerprints of these two different business s were too difficult to distinguish using purely automated algorithms, so Google decided to stamp out the one that offers the poor user experience.