The issue reported by the NYT is that some people feel it's unfair Google shows ads after you use their new "site search" special result box*:

http://www.nytimes.com/2008/03/24/business/media/24ecom.html?ref=technology

(Wasn't able to reproduce the sample discussed in that article, by the way, not sure why...)

[Thanks Nikita!]

*A site search box like this one
http://blogoscoped.com/files/google-sitelinks-search-large.png

This was mentioned over on TechCrunch too:
http://www.techcrunch.com/2008/03/23/some-retailers-oppose-googles-secondary-search-feature/

The NY Times article is just crap. You could perform a 'site:' search and get the same results. Google has been tweaking some of the things they do so that novice users can start to become more advanced users. This is similar to the redesigned Advanced search page that was discussed not to long ago. The article makes it seem like this is brand new results that we were never able to get before. Just more FUD in the news.

I guess the bigger question then is "should Google remove ads when you do a 'site:' search"? I mean apparently what you wanted was to find results from that site only. Then again, I suppose that's the nature of AdWords, that it's sort of understood they're *not* the most relevant stuff you're looking for but just how Google makes money (and removing them would remove Google's revenue to deliver the search engine). On the other hand – if it turns out people never like ads on "site:"-searches, maybe Google could remove them in those cases as a "usability problem".

I don't think its necessary to remove all ads from 'site:' searches. I like them being displayed when my query doesn't have any results like this search: http://www.google.com/search?hl=en&q=nikon+D3+site%3Abestbuy.com&btnG=Google+Search