First Danny links to Andrew Goodman's Should Google Be Competing with its Advertisers? (If So, How Much?) blog entry from back on December 06, 2004. In that entry, Andrew writes about how you can't outrank Google's AdWord ad for the search flight tracker (verified, Google is #1 at this moment). Also, Danny notes if you search on mapping you get Google Maps in the number one spot. So I decided to try out the new product Google came out with and search on instant messaging and guess who is number one? Google Talk. So something is definitely up.
Preceding Danny's post, asking more questions, AdWordsRep replies to the initial inquiry stating that "Google's house ads are run on the exact same system and under the exact same rules as any other AdWords advertiser. There are no special levers levered, no special buttons pushed, and no special strings pulled." The reasoning used for why a Google ad would be "glued to the top spot", as AdWordsRep says, is because Google's AdWords ranks based on CPC and CTR. Since its a Google Search Engine, and someone using it is more likely to know the Google brand, they are more likely to click on Google ads.
All in all, Danny concludes his questioning with the following...
Above all others. Perhaps since that's so clearly part of google -- using even the google domain -- it's a free house ad and hard coded? But perhaps Urchin had been treated differently, then got treated as an internal google product, then shifted back to "normal?"
It is really odd that apparently suddently, it's lost that rock solid hold it had. That doesn't seem like something you'd expect to occur in only a few house.
Anyway, anything more you can provide would be helpful. Sorry to sound so doubtful, but these other house ads just seem so weird to think they are actually costing Google money and still getting the top rankings all the time.