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I'm not sure if this is allowed so feel free to edit, but my search term was "adwords api" and the four line ad was the second from the top on the right.
Google is constantly testing new layouts and formats, so this wouldn't surprise me.
Yes, I do see it now. I opened IE and did the search and sure enough...four lines.
Seems strange that they would contact that site to test something like this though.
You think the fact that the minimum bid update's impact on eliminating small-time sponsors has something to do with increasing the amount of ad space, considering there will be less people advertising. If so it will be REALLY important to be in the top 5 sponsors now.
You're right, if this does get implemented it probably will cut the number of advertisers per page by half.