Paid search ads, responsible for the barrels of cash that have fueled Google’s meteoric growth, could be one of the worst-spent marketing dollars on the Internet, according to an eye-catching audit of search results to be released this week.

Most executives, with little regard to how well their companies fare in the more important natural search results – the top sites that come up after an Internet search – overspend on paid search because it is the one area of the search market they understand, said a director with London-based ISM (Internet Search Management), which will release the audits.

“Executives know the battleground for business success today is being fought on the search engine but they know very little about how well their companies are faring on natural search or if their paid search advertising dollars are well spent,” said Phil Millo, an ISM director.

As a result, Millo said, companies are pouring money into paid search – with a good deal of the cash not improving their marketing muscle.

Just this month, in a spat, eBay angrily pulled all of its advertising money from Google – and saw little drop-off in traffic. The move and its results have opened a lot of eyes.

“It’s gotten to the point that if they’re spending $100 million a year on paid links, maybe it’s time to start reassessing where it’s going,” said Mark Simon, of Did-it Search Marketing, a firm that helps companies with their search marketing plans.

Indeed, eBay spent some of the money they withdrew from Google with Yahoo! and other sites.

Steve Grossberg, the president of the Internet Marketers Association, which represents some of eBay’s biggest sellers, said the day eBay launched a Web banner campaign on the homepage of Yahoo! was his biggest sales day of the month.

Whether other large Google advertisers – like Amazon.com, Bizrate.com and Target.com – will follow suit remains to be seen.

ISM’s audits track the top 4.5 million search phrases on Google and Yahoo!, a total of 7.3 billion searches a month, to determine which companies across 50 business sectors pop up most frequently in the top three or four positions in natural search. Natural search results are based mostly on a site’s traffic, relevance and how many other sites link to it.

The ISM audits, to be released in London, break down which of 50 business sectors are locked up – that is, have large chunks of natural search dominated by a handful of companies – and which are wide open.

The digital camera sector is pretty well locked up, the audit found, meaning it would be very hard to create a Web site or Internet marketing campaign that would successfully steal market share.

DPReview.com, a site with news and reviews of digital cameras, the ISM audit found, was the leader, turning up in the top three or four search results on Google and Yahoo! 73.7 percent of the time. It was purchased last month by Amazon.com, which was looking to sell more cameras.

“It’s quite interesting that Amazon.com didn’t look to mount an Internet marketing campaign and purchase search ads to gain market share but rather bought a company few people [had] heard of but which produced excellent natural search results,” Millo noted.

Google’s own research shows surfers look toward natural search over paid search by a ration of 4-to-1, Millo said.

ISM is working with Wal-Mart, Staples and Mercedes-Benz to sharpen their Internet marketing strategies.