There is a long standing debate on how Google handles websites that are buying and selling links. Now, Google's algorithm is based to rank sites on a number of different metrics, but it is agreed that link popularity is their top determining factor. Well, that means by their very nature Google has created the demand for link purchases, yet they openly state that they penalize (penalize might be to harsh of word, maybe neutralize is more appropiate) for for such practices. Now, to me this seems like such a double standard. To create a demand for a market and then "slap" websites that use and/or cater to that demand, but that is not the point.
Google's Matt Cutts often makes cryptic statements in his blog and on forums such as, "be careful what you pay for" and he also states that Google technology is getting better at determining what sites are selling text link ads. He says that sites that are caught participating in such acts will lose their credibility or "trust" with Google. This all may be true, but I find it difficult to concieve that the algorithm designed to give credit for links is able to easily detected a site that is selling text links. Of course, I have no insider information with Google, but I would imagine that the "technology" they refer to as being able to spot these sites is a lot more like people physically researching claims of links being sold on a site and a human actually making the determination.
Bottom line is it doesn't seem that Google is any better at having a spider identify a site selling links than they ever were. It seems a lot more likely that more and more people are squealing on their competitors to the Spam Team at Googleplex and then the sites being manually identified.
You may hear a lot of people stating that link purchases are "unethical". Even those stating that the ethics are invovled are participating in link exchanges, using a link to their site in forum posts, blog posts or submitting to tons of directories. This is the same type of practice, just without paying a site directly. So in my opinion ethics should not be an issue. Is it unethical for a website to be able to monetize ad space? If it is then Google's own AdWords are unethical.
All of this being said, if you are considering buying or selling text link ads, you should still probably watch out for obvious markers that the ads are purchased. While I still believe that most sites that have been identified have been done by a human, it is very likely that the Google algorithm has certain filters built in to look for things like text reading "Sponors" or "Advertisers" - there are several variations, but you should get the idea. Links that are embedded in to the meat of a document are always the best, so try to secure that whenever possible. That is not to say that text links incorporated in the side, header or footer navigation are not effective, but they can be easier to spot if someone was looking.
There is a great thread going on at WebMasterWorld Forums, Does Google Reward Backlinks Buyers & Sellers? covering this topic. I was particularly impressed with the points made by whitenight. The thread is rather long, but it is a good read with some excellent points.
Until next time
Happy Linking,
LinkQueen
# posted by LinkQueen @ 8:55 AM