Google is placing a huge bet with Google Instant, the most radical overhaul yet to the way the search engine work, one that could potentially affect revenues generated by Adwords.
Dan Friedman from the Inside AdWords team explains in a blogpost that Google is expecting increased user engagement with search services and ads as well.
Since the SERP (Search Engine Results Page) changes in real time depending on the characters that are typed in the search box, the ads on the right will change dynamically as well with some SERPs likely to have no ads at all (something we've noticed while testing).
Friedman adds that Google Instant "changes the way we think about impressions" with an impression now being counted when either of the three following happens : a user takes an action to choose a query, clicks on a link in the SERP or stops typing for three seconds or more.
Worryingly, Google apparently doesn't know whether it will increase or decrease overall impression levels, something which it should have processed during prior testing. But the search engine reckons that Google Instant will improve the quality of the clicks.
Tom Foremski, writing for ZDNet, also points out to the fact that Google Instant might distract users from the ads given that the eye tracker data presented at Google launch showed that users will tend to focus on the search box and the area below it rather than elsewhere.
It is obviously too early to judge whether Google has shot itself in the foot as Foremski puts it but given that shares of Google are up, it is likely that investors and observers alike are pleased that Google hasn't lost focus on its core services.