Google Tests Local Ads on Maps at ClickZ covers David Galbraith spotting that Google now appears to be inserting paid ads into maps on Google Local. For a search on hotels new york, he's spotted "blue pins" that correspond to what may be new sponsored links that come above editorial listings to the left of the map.
On my end, I see the textual ads but not the blue pins. Neither does Gary. A search for pizza san francisco shows a text ad but no blue pins. A few other searches I did also showed sponsored ads but no pins.
As I said, the sponsored links seem new. I don't recall seeing them on Google Local before, but it could be they were there but less noticeable before Google Local and Google Maps merged. We're checking on this and tracking down the mystery blue pins!
Want to comment or discuss? Visit our SEW Forums thread, AdWords Balloons in Google Maps.
Postscript: Statement from Google, "As part of our continuing effort to provide a positive advertising experience for users and advertisers, we are always exploring ways to improve the way we display ads. We are currently conducting a limited test of ads on Google Local. We do not have any other specific details to share at this time." Also, text ads have been on Google Local since 2004.