Once during a visit to Google, I heard a senior exec describe Google's take on the relationship between paid and natural search. This was some time ago, so I'm paraphrasing from memory, but he said something to the effect that the left side of the screen (organic, unpaid search results) was for the non-commercial content -- blogs, reviews, rants, articles, information -- whereas the right rail (paid search) was for commerce. "If you're a commerce site, you need to pay for your space on the page," he said.
His comment popped into my mind while reading an interesting post by John Biundo and Eric Enge about advanced tricks for building Google Custom Search Engines (CSEs). In passing, Biundo and Enge describe Google's hand-tagging of sites:
A surprisingly little-known fact is that Google, and some trusted partners, have quietly annotated a large number of web sites with standard labels.... in addition to the medical domain, Google (and an impressive list of partners) have annotated many other "Topics", including: destinations, autos, computers and video games, and other areas. It's reasonable to expect that this annotation will continue â€“ in fact, Google has a program that encourages users to help with the massive task of annotating the web.... After playing with this test CSE for a bit, it seems clear that Google has made a good start at labeling commercial sites.
Yes, online retailers should make all reasonable ethical efforts to win appropriate free traffic from the Google. But realize that your site is probably tagged "store" deep within a Google database somewhere, and the algorithm may hold that against you when computing organic results.