Also, could you provide an example of where advertising improves the user experience?
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In today's heavily SEOd world, sometimes the AdWords ads are actually more helpful than the first 10 results. It's always a sad moment when that happens, but in certain verticals it's becoming almost inevitable despite everyone's best efforts.
An example (there are probably many better): I was looking for spas in London the other day, and a lot of the results seemed pretty dodgy - tantric therapy? no thanks! - but the ads for Groupon and competing services reminded me that I might be able to get a good daily deal and led me to explore quite a few options that weren't in the search results.
Disclaimer: I work for Google, but not on any advertising-related products (unless you want to take the stand that every Google product is advertising-related; thought I'd head off that reply in advance).
Similarly with health-related queries. When you have a serious problem, you're after any kind of information that might help. In my personal case, several of the ads returned more interesting info than the first few pages of algorithm-ranked results.
It improves the user experience by allowing amazing free services to exist.
You're being entirely too cynical about this. Yes the profit motive exists for corporations. So what? It exists for individuals too. Do you only do volunteer work because anything else would be selling out?
Seeking a profit does not imply moral bankruptcy. This sort of thinking is a knee-jerk reaction to the de-humanization of commerce and interaction via the internet and call centers. But don't forget that companies are still made up of people, and it's still possible to have a great relationship with a company, even a very large one. Granted, Google is one of the worst in this regard, but let's not throw the baby out with the bathwater.
It improves the user experience by allowing amazing free services to exist.
That may be true, but that isn't what I meant.
I meant that there are numerous example where exposing your audience to something for commercial purposes may benefit the audience.
For example, the paid results of a search like http://www.google.com.au/search?q=web+hosting are arguably better than the heavily SEO'ed organic results. That's because the profit motive for the web companies encourages them to pay enough to expose themselves, whereas less legitimiate affiliate sites can't afford to compete because they are further down the profit chain (meaning they don't have the margins to pay for the most common keywords)
The other good example (as I noted elsewhere) are recommendation systems like Amazon and Netflix use.
Netflix and Amazon recommendation systems.