I understand that google will penalize you for selling links. What I was wondering is if selling banner space on your site will also get you penalized? Does anyone know?
You can sell links, you are just supposed to use a no follow tag if it's a paid for link. I assume the same goes for banner ads.
Well the link is a anchor tag for your banner, so yes. The funny thing is how do they know if you are selling link space or placing them for free. So I guess they penalize also for free links!
I think Google have some kind of AI, able to detect linking patterns. So if you have non-related links, and links to this sites also exist on other non-related sites, they can assume these links are made for PR manipulation. So I guess the key word is "non-related". This can be applied to both paid and free links, main rule is not be linked with non-related and bad reputation sites.
I think you greatly overestimate Google's capabilities. Especially when you start tossing around AI. They may have an algorithm that aides a human in spotting link purchases. However, if they were as sophisticated as you think they are at finding link sales why would they need a link sales tip line?