The topic of click fraud is rapidly growing, with more and more media calling attention to the problem. If click fraud is not dealt with, then the PPC revenue model will eventually go bust. Now, I am not saying this is going to happen, or that it will happen any time soon, however, the potential is there. Of course, this would effectively destroy Google, as their entire revenue base (almost) is reliant upon PPC (Adwords / Adsense). The other search engines have various revenue streams, so the loss of PPC revenue would not likely kill off their businesses.
But let's imagine for a moment what the effect would be if PPC suddenly disappeared. Some other sponsored listings model would eventually take its place, I'm sure, but until then, what would it be like to have nothing but organic search results? One thing that might happen is that everyone who is used to paying for clicks, will now happily do everything possible to rank in the organic listings - including massively spamming the engines. The SERPs are already overloaded with spam. More might just kill it completely.
But could a PPC bust actually help the SERPs? Conspiracy theorists might think so. If Google, for example, really does drop site rankings in order to entice them to move to PPC, then that model would no longer work. Perhaps rankings would remain. Ok, I don't really subscribe to the idea that search engines do this, but I never discount the possibility completely. So, IF this is occurring, the end of PPC would put a halt to it quickly.
I am not sure what the overall effect would be of a PPC bust, but I would bet it would cause a chain reaction of some sort that would greatly affect organic SEO. Just something to think about when you are bored... 🙂