From the Google update in October, some websites reported a significant drop in PageRank, which was rumored to be caused by the use of paid links. An unofficial confirmation of this was made by Google’s Mike Cutts. On November 22 Google made it official, with a reiteration of what it has previously said about paid links.
“Some search engine optimizers and webmasters engage in the practice of buying and selling links that pass PageRank, disregarding the quality of the links, the sources, and the long-term impact it will have on their sites. Buying or selling links that pass PageRank is in violation of Google’s webmaster guidelines and can negatively impact a site’s ranking in search results.
Not all paid links violate our guidelines. Buying and selling links is a normal part of the economy of the web when done for advertising purposes, and not for manipulation of search results. Links purchased for advertising should be designated as such. This can be done in several ways, such as,
Adding a rel=”nofollow” attribute to the tag.
Redirecting the links to an intermediate page that is blocked from search engines with a robots.txt file”
The comments from Google are open to interpretation. It looks like buying paid links from websites that are related to your own, should not result in punitive action. To avoid any potential negative actions from Google, always source your links from relevant websites. If you have any thoughts on the use of paid links, please feel free to share them below.