Google makes money by selling targeted advertising space. That’s its core business. Providing search results is simply the vehicle for doing so. Search doesn’t generate revenue in itself.

Has it ever occurred to you how contradictory the goals of these two activities are?

One being to provide perfectly targeted search results, the other to sell as much advertising as possible?

What would happen if every time someone performed a search, they found EXACTLY what they were looking for in the first few results?

This is what would happen: people would hardly ever click on the Adsense ads displayed on the results pages.

Why do people click on ANY link?

Because they think that it will take them to a page about whatever it is they are looking for.

Why do people click on the Adsense ads around the search results?

Because they think the ad is more likely to take them to a page about whatever it is they are looking for than the other links they see on the page.

Key Point: