I think paid links are just dandy!  In every other advertising venue, reputation is purchased.  Branding campaigns are ubiquitous.  It does not take long to spot paper advertisements that have no real call to action; rather, they aim to increase a product or brand's "ranking" in the human mind.  This is a what a paid link is to Google.  It is the analog of a branding campaign.  

I'm not saying I think link networks are cool.  I'm saying I see nothing wrong with a live link on a prominently placed advertisement.  Google apparently has a problem with that.  Remarkably, Google has no problem with doing this as long as they get to sell it.  Yes, they announce that it's an advertisement — but that's their philosophy, not mine.

Since I believe that Google should not try to fight the way advertising has worked throughout time, their villification of paid links and creation of a new "nofollow" attribute is not entirely ideal.  It doesn't have any real analog in traditional advertising.  Paid links manipulate search engine rankings just as branding campaigns manipulate humans.

Clever humans may identify a paid advertisement as such.  However, very few traditional advertising venues go through the rigor of identifying advertisements explicitly — except, perhaps, where it is legally required.  Conversely, some go through trouble to make the identification difficult.  They want to sell ads after all!  Google should not systematically degrade the value of advertising on web sites.  Clever advertising should be encouraged and rewarded.

Google must do this sort of identification just as a clever human would, realistically.  If it influences a clever human, it should influence Google.  Google, you are clever, no?

I see the imposition of "nofollow" attribute, and threats of devaluation of outbound links a stopgap, unrealistic solution.  Link equity, like any other equity, is destined to be sold.  Paid links should influence rankings!  But Google should try to identify them and devalue them, especially if they are irrelevant or poorly placed.  That is what a human would do.

So I disagree with Matt Cutts on this one.  Then again, who knows what Matt Cutts really thinks?  He's definately at least somewhat tethered by Google with regard to what he says.

Google should not devalue a paid link unless it is determined that nobody actually sees it.  It has behavioral data that can help in that regard.  I suggest that paid advertising should work like it does in the world.  If people click on it, the link should count!  That is an analog of traditional advertising.

Google is fighting an uphill battle here on reality.  I understand why the idea of a "nofollow" attribute turns Google on, but I don't  really endorse it as a means to identify paid links.  As long as their is equity in a link, people will want to pay for it.  "Nofollow" may make sense as a "disclaimer" to mitigate guestbook and comment spam, but that is all.

The rest, Google, is your problem.

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