Phoenix Nest still has ads on the leftside

Advertisers, however have to improve the quality of
ad-text, that is have it be more relevant to the search,
to be listed on the left. The top three leftside ads,
where they exist, are shown on a gray background.
The others are mixed in the search results.

As Robin Li stated in the Q3 earnings call:

Phoenix Nest is a new option, a new system, it’s
a new mechanism and it’s independent of where [ads]
are displayed. So this switch that we are talking about
means Phoenix Nest as the auction system, as the
bidding system, as the keyboard management system,
will take over all of the inventory we have on our search
results page, meaning the main panel will also be powered,
if you will, by Phoenix Nest.