Alex Iskold, of Brad Feld's instant classic "giant brain" description, has an interesting post up about Amazon's experimentation with PPC ads on their product pages.
I wrote a comment on that post that was longish by my standards (and also not a throw-away joke!) - so I thought 'what the hell, I'll just republish it on Mattishness'. Here goes:
"i dont think it sounds unreasonable at all that adding ppc contextual ads would capture some incremental revenue from visitors who are not interested in buying at that time, and the display banners add a little incremental revenue as well. obviously, the key is to optimize how the distracting ads are promoted so they only distract the correct amount from amazon's core salespitch(es) - and so the average revenue is slightly higher than without 3rd party ads
including the ppc ads is a little cynical, in that amazon only wants to send visitors who will not buy, but that's a well-known strategy in the affiliate world."