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Here's some more food for thought:
FF browser 428,000 results and the sponsored links are at the top of the page.
IE browser 424,000 results and the sponsored links are below the 3rd result.
Is Google also being selective as to which browser, they're going to display these presumed beta search results?
These two questions each can have very different answers, of course. :)
[edited by: tedster at 4:59 pm (utc) on Aug. 8, 2008]
[edit reason] specific keywords removed [/edit]
That position is a spot where Google does a lot of testing using their Universal Search infrastructure. There are still 10 organic listings on the page - in addition to Adwords at the top and right plus Shopping below #3
I did just find a result like this, but it's NOT Adwords listings below position #3, it's Google Shopping results (Google Products plus a dedicated Google Checkout search.)
Matt Cutts refers to editorial (organic) vs. paid search and says they want to keep it editorial. I don't call inserting their own links exactly editorial. Think about what kind of a fuss would be raised if Yahoo - or Heaven forbid! - OMG what if Micro$oft did that in their search results.
For the searches i ran they are appearing in position 4 (or 3rd if you include a double domain listing).
On Google.com it's also changed but for some terms the listings appear in their original position.