There was an article at TechCrunch that caught my eye today. It showed a screenshot of Google Image search with ads in the search results. The article didn't have that much info but I decided to play around with Google Image search to see if I could trigger any ads to appear.

Here's what I found out so far, you can trigger ads with generic search queries like 'shoes' or 'software'. Ads can sometimes be triggered with product names. I couldn't get a single company name to display an ad like 'Nissan' or 'Microsoft'. I haven't seen any Google Checkout icons next to any ads. Not sure if this is because its brand new or if they won't do that with this kind of ad placement. I know for sure RitzCamera is a Google Checkout partner and none of their ads had the icon. On to some screenshots:

Generic product search by a company: (Canon Camera)

farm4.static.flickr.com/3165/2 ...

farm4.static.flickr.com/3186/2 ...

I am getting a different ad location:

picasaweb.google.com/dberglind ...

there was also experiments last year:
googlified.com/images-search-e ...

Wasn't there a story some years ago, where a Google engineer came up to Sergey/Larry and showed them that they could use ads in image search and make X revenue out of it, but it was squashed by Larry/Sergey because they wanted "clean" results for the user and not the money ??
(I don't have a link right now, perhaps you can find one)

Is Google now leaving their path and try to make more money ?

Randy,

Marissa Mayer stated earlier this year, that they [Google] are missing out on probably 200 million in advertising revenue from not having ads in Image Search.

valleywag.com/383833/google-mi ...

SearchEngineLand has a post about this and they also have seen banner ads in the wild.

They've also received a response from Google:
<< As part of our ongoing commitment to innovation and to help users find new and better ways of getting the information they’re looking for, we are currently conducting a test to show ads on the results pages for Google Image Search. The experiment is restricted to U.S. advertisers who are using formats including text ads and static image ads. >>

searchengineland.com/banners-i ...

maps.google.de/?&t=k&z ...
these are photos from planes, look at this one!

jim, What makes you say that? ;)

farm4.static.flickr.com/3144/2 ...

Text Sponsored links are in Image Search now:

farm4.static.flickr.com/3135/2 ...