On a recent summer morning at dawn I was jogging along a country road when I came upon a dead, immature male Pine Warbler, Dendroica pinus, apparently run over by a car. I carried him home, carefully parted some feathers on his head, and at the right you can see the ear-hole I exposed. Before I began parting the feathers, there was absolutely no indication of any ear-holes, but once the feathers were spread, the hole became obvious. It's nearly as large as his eye.
Why are bird ears so inconspicuous. One reason becomes clear if you've ever tried to carry on a conversation on a windy day, with wind thundering around your ears. Since wind constantly streams around flying birds, if they had floppy ears like we do they'd hear a lot of ear-thunder. Not having ear-flaps is just the price birds pay for being able to hear well as they fly.
Most birds have their ear holes covered with tiny feathers specially designed to cut down on wind noise while permitting sound waves to pass through. These feathers behave like the foam covers you see on politicians' microphones at outdoor rallies, where breezes cause uncovered mikes to thump. Some diving birds, such as penguins, have strong feathers covering their ear-holes, to protect delicate inner ears from intense water pressure.
Some birds even locate food with their ears. The Common Barn-owl can catch a mouse in total darkness, as the mouse scampers across a floor.