It's much easier for Google to ban BMW when they don't run AdSense than it is to shutdown Demand Media and directly impact Google's bottom line.
"Revenue" is not a metric used to decide whether ranking changes launch. Period.
The official page for Google Checkout to this day states "Google Checkout users click on ads 10% more when the ad displays the Checkout badge, meaning more traffic to your site."
That is a pretty clear-cut example of Google tilting their "algorithm" toward promoting another Google product. And in an area where one of our small clients didn't use Google Checkout, that change simply priced him out of the ad auction. His profit margins after ad costs were roughly 10% & with that 10% cut in relative clickthrough rate he no longer had a place in Google's ad auction. He was forced to use another Google product if he wanted to be profitable with AdWords.
Of course one could say that the organic results are different than the paid results, but the Google editions ebooks ranked quickly in the US after the ebook store was launched, Google only rolled out universal search after they bought YouTube, maps & local results now come with tags that earn incremental revenues from the "organic" search results, etc.
Q4 Financials: http://investor.google.com/earnings/2010/Q4_google_earnings....
Lets see two quotes: "GAAP net income in the fourth quarter of 2010 was $2.54 billion"
"Google's partner sites generated revenues, through AdSense programs, of $2.50 billion, or 30% of total revenues, in the fourth quarter of 2010."
If Google 'shut down all of Adsense' because they realized it compromised their search quality, they would have had only $40M in net revenue for the quarter last year. (Doing the simple math of removing AdSense revenue from the picture.)
So you think Sergey and Larry would put up with a 30% drop in revenue to take the high road? We're talking 2.5 billion dollars here, not mouse nuts even to Google.