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Google appears to be testing text ads on its image search. Michael Gray has a screenshot:

This isn't the first we've seen Google testing advertising methods on image search. Before, they were trying image ads as Barry Schwartz at Search Engine Roundtable recalls.

The appeal of the image ads from Google and the advertisers' standpoints would obviously be a more camouflaged feel, with people naturally expecting to find images in an image search. This would no doubt draw plenty of criticism about paid link disclosure, however. I'm sure Google would mark them as sponsored, but that wouldn't stop the Google-bashing from commencing. They still get it over their marked sponsored results on regular searches.

It appears that they may have abandoned the image ad idea anyway in favor of the above text approach. I have personally not come across any ads yet in my own image searches, and I have to wonder when Google will move either advertising strategy out of the testing phase and into regular practice. How many of you are seeing image search ads right now?