LETS MAKE SOMETHING CLEAR -
Buying adwords does NOT help you rank higher. And not buying adwords does NOT get your site penalized. There is not 1 case study, 1 shred of proof, 1 *anything* that even remotely supports this idea. I rank in 14 different niches #1 and not once have I ever dropped a penny on adwords. Most of the people in my niches who buy adwords are the same people who DON'T rank organically in the SERPs. And this update had 0 effect on any of my rankings.
I understand the OP is a respected member on this forum.... but is anyone paying attention to what he actually wrote? This update rolled out literally days ago, and to claim it was an "adwords update" is beyond ridiculous. Especially when Matt Cutts himself said this was just another update targeting spammy sites.
I don't believe for a second that Google would do this out of mere corporate spite.
Ebay is worth about 60 billion.
Google is worth about >>> 460 billion.
In laymans terms, Google doesn't give a shit about Ebay. And Ebay was NOT penalized cause they stopped buying adwords. They got penalized because they had thousands upon thousands of thin, doorway pages... the EXACT TYPE of content that Google hates, cluttering up their SERPs.
Everyone know's that Ebay's adwords campaigns were a mess. They had ads showing up for terms like "Severed Head Sales" and "Vomit Sales". This is a 60 billion dollar company that has no idea how to use negative keywords! Then they have the nerve to bitch in public about adwords not being profitable? Well, no shit. And where thing's get REALLY IRONIC... is when you realize that their SEO strategy was 100xs worse than their adwords campaigns. Viewed in this context, by any objective, rational minded person, there is only *1* explanation for why Ebay lost their rankings. It's not magic. It's not voodoo. It's not some adwords conspiracy. Its because...
>>>> they are completely, comprehensively, and grossly incompetent. They were BEGGING for it.
They were doing something Google hated. Google released another major update.... and bye bye went Ebay. The point I'm making here is simple. If Ebay was competent and actually had a clue what they were doing, it would not matter 1 bit whether they were buying adwords or not. If they were doing proper SEO, they'd still have their rankings.
But they don't. And all of you Google haters, the same people who make most of your money thanks to G.... if you really despise them so much then go use Bing or Yahoo. Cause these Google bashing threads are beyond ridiculous. If ANYONE deserves to be bashed here it's EBAY, not Google.