How would Google be able to verify that a link is paid?
In the long run, it would make Google’s results less relevant , because it will begin to be noticed that certain expected results is not there.
I have noticed several sites that sells text link ads experienced a drop in PR. They are actually killing the directory industry, Matt Cutts specifically said that if you run a directory with quality sites, that is okay. If you accept any link then you may have problems.
I would personally follow their guideline, I do not agree to their policy though. I am thinking to start using the “nofollow” tag. Google is too important to ignore.
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