When Google introduced their AdSense network they not only created an ad syndication network, but also a way to syndicate the Google brand. At first it was the cute Ads by Gooooooooooooogle stuff. Then they started marketing Google Checkout heavily by offering $10 off coupons. Then they started syndicating flash and video ads for Gmail, then Google Pack, and now they are placing Google Checkout icons in the AdSense advertiser ads.
It's a nice deal for Google that they smart price some of the inventory down to virtually nothing, then buy it off themselves. Given that they have no real competition could you fault them for doing so? Even classier of them to put ads for their own products inside ads that advertisers are paying for. But their marketing is good enough that nobody cares. Who else could do that?
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