This suggests otherwise:
“For example, entering the query "buy domain" into the search box on Google’s home page produces search results and an AdWords text advertisement that appears to the RIGHT of Google’s search results” [1]
It is from October, 2000. It is so ancient, it is even before Schmidt happened. I don’t believe anything preceded that, but to be sure we’ll have to wait for Larry to chime in and clarify.
[1] http://googlepress.blogspot.com/2000/10/google-launches-self...