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Lets imaging we're searching to buy a 'perfect widget' and we find one in the #1 entry on the #1 page, what do we do? we search no more and we don't click on the ads. If however we can't find a 'perfect widget' within the first few entries we're more likely to click on an ad that has 'perfect widgets' listed.
In short mediocre search results probably make the most money for google.
The only reason Adwords zoomed into the market was that so many people already loved Google search. Now it's a few years later, but it seems clear to me that if Google loses some of their market through dissatisfied users, then they will also lose a similar proportion of their ad revenue.
Organic still is still the first place most people look on a search result -- eye tracking "heat maps" show this over and over. So I doubt that Google would intentionally aim for mediocre organic results.
<edited for spelling>
[edited by: tedster at 4:45 am (utc) on Jan. 27, 2006]
when so many are looking for ways to manipulate Google to get their own site to the top
I manipulate my sites to be on top - but only for "on topic results". So if you click on my SERPs listing you will actually get what you were looking for. You can also try the ads listed with the organic results Bizzare example: (find Space Shuttle Replacement parts on Ebay from $1.99) - hardly useful.
If the surfer cant distinguish between a good organic search result and a crapy ad then its "Caveat emptor".
Let the surfer beware...