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One of the biggest debates raging in the search marketing world right now is Google's stance on paid links. Google went a step further than just talking about it for the past two years, and dropped PageRank values for many sites known to sell links specifically for the purpose of passing PageRank and thus, rankings, on to the buyer's site. My solution to the paid link epidemic goes one step further; but first, here's a brief synopsis of what has actually transpired.
Google feels it is a violation of organic search engine optimization practices to pay for incoming links... but only certain kinds of links. Some webmasters do a great deal of business by simply selling outbound links off their high PageRank web pages. But there's a difference between that and say, paying for a business listing to the Yahoo! Directory. There is more value and legitimacy in a Yahoo! listing than buying a text link on a pharmaceutical site pointing to your gambling site with keyword stuffed anchor text. Yahoo! also does not accept all submissions, so there is an element of quality to their directory. There are differences in paid links.
Sounds like Google's just stepping up their algorithmic intelligence once again and defining new black hat techniques, right? Perhaps, but not without controversy. News in September spread that the once very popular Aviva Directory, among others, had suffered drastic drops in Google rankings, which ultimately would lessen the quality of the outbound links they list. Aviva was one of the more SEO-friendly directories around, which led to its popularity for webmasters. PageRank was passed on several levels deep, and the $50 fee was very reasonable for a permanent PR3 or PR4 one-way link. See more purchase links
Should you buy links? Google is said to not like paid links. As an SEO, I am still not sure! How easy would it be to make your competitor at the top of the search engine rankings loose their number one spot by buying a few paid links for them? The only problems with this idea are the fact that 1 it's unethical 2 it's costly and 3 it might do more good than harm!
I think that buying a few well targeted links with sites that are very relevant to your own site AND will actually bring your some traffic maybe a good idea. This is not to say that I don't make my clients fully aware that Google is said to frown upon this practice before I ever suggest buying a link. I try every method available to me before I go ahead and suggest that maybe we should try purchasing a well targeted text link.
Basically, you need to follow the Google informal corporate motto, and 'Don't be evil'. If you are trying everything and are still not getting anywhere, it might be time to start looking for that link. There are many link brokers available and some of the big webmaster forums can help you find a related URL.
I would suggest that if you do think about buying a link, make sure the site has PageRank and does not have more than 10 outgoing links if possible. The less outgoing links on a page the better - so it would be a good question to ask how many links they intend selling.