For another take on this announcement check out:

http://www.robweatherhead.co.uk/google-to-reverse-minimum-bid-and-introduce-dynamic-quality-score

Point taken, but that is why the title has a question mark at the end of it instead of a period.

If Google start adjusting the quality of the traffic immediately and they are happy with the results it will spread across their network.

My opinion based on past actions

If you refer to this page:
http://www.google.com/adwords/learningcenter/text/18989.html

You will see the section at the bottom that talks about Smart Pricing for the Content Network. It also does apply to the Search Network (but only for partner sites, not for Google’s own search pages)

This new quality score reflects the quality of the advertiser’s keywords, ads, and landing pages.

Smart-Pricing reflects the quality of the publisher’s site (and traffic) for ads on the Content Network.

I don’t read it that way.

if you read the announcement from the beginning it seems to apply to landing pages:

In July 2005, AdWords introduced minimum bids for keywords based on Quality Score. This system allows us to show very high quality ads to Google users, while also giving advertisers control over their keywords. Since 2005, we’ve improved Quality Score in many ways, such as the inclusion of landing page quality and landing page load time as factors. Along the way, we’ve also received much helpful feedback from both users and advertisers.

Today, we’d like to let you know of further improvements we’ll introduce in the coming weeks — based, in part, on this feedback. First we’ll outline the key points, and then dive into the details:

* Quality Score will now be more accurate because it will be calculated at the time of each search query
* Keywords will no longer be marked ‘inactive for search’
* ‘First page bid’ will replace ‘minimum bid’ in your account