Hitwise has new data out showing that the percentage of traffic referrals from paid search compared to other traffic sources has declined in the past year. This should not be thought of as a drop in paid search traffic. In fact, the opposite is true. But if you're looking at the pie of what drives traffic to a site, paid search's slice has become smaller.
Search as a whole, however, is increasing. That means organic has to be driving things, which could be a result of the economy affecting marketing budgets.