Today at Search Engine Strategies, an angry SEM cornered Google’s ad quality PM, Nick Fox, about CSEs and their use of arbitrage techniques. Essentially arguing that CSEs are nothing but glorified affiliate arbitragers. Nick hints they are working with CSEs on the problem.
I think what he’s referencing is that on occasion you’ll see a CSE buy a non-ecommerce term and then pump it through AdSense.
The interaction between Google/Yahoo! and CSEs is going to continue to be an area to keep an eye on in 2007.