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You hand-crafted a static ad block that has the look and feel of the dynamic Adsense ad block? So that the casual visitor would not, at first glance, distinguish one from the other? (If so, I assume you omitted the "Ads by Goooooogle" in your custom ad block.)
Very interesting idea, but does this violate the TOS?
if they ever appear on the same page at the same time, then yes it does go against TOS.
I thought that was just other contextual advertising? His links are just his own links.
You see this all over the cheap scummy sites, they just create their navigation systems to appear identical to an AS ad...
The showing of 'better' ads is simply because you are explicitly saying things about fonts etc... I am sure if you placed the same thing outside of your self created AS environment you would get similar results, although probably less confused clicks.
Now what? Is that fooling, or is that acceptable?
Because, Google themselves says that the ads should integrate into the site. Look like part of content etc..
Also, I keep seeing advice that you should remove borders and use the same style as the rest of your page. So is that following Google's advice, or tricking people?
I am not sure about the affiliate ads styled like Google ads, though.. I think Google will react there, as they are pretty nasty about other advertisements that look like them...