There are reports that search engines are trying to develop a logic to detect paid vs natural links. It is going to be extremely hard and even the best logic might end up punishing some good guys and not punish the bad guys. Till then, from what I hear, Google is only going after the big paid link sellers.
Google has had the capability to detect certain kinds of paid links for some time. What's been happening in the past few months is simply a stepped-up campaign against PR selling and an effort to improve the methods they have been using to detect paid links. Correct. I personally know of one person who was systematically reporting certain DP threads to the Google paid links spam report site. If you think you don't have a competitor somewhere who would love to see your sites disappear from Google altogether, you're dreaming.
Certain people are overreacting. Purchasing links is fine if you go about it in the correct way. The problem Google have with paid links is that certain people are using them to manipulate PageRank. By buying links that carry weight people can increase their PR without any work. If you have enough wedge it's extremely easy to create pages with a high PageRank with very little effort. This whole process of buying links to increase PR makes the PageRank algorithm useless. Matt Cutts has actually talked about this himself. You need to understand that a link is essentially a vote. Buying votes is increasing your rank artificially. It's cheating and Google can not allow this as it affects the quality of their search results. This however doesn't mean that you can't buy links. As long as the links do not count as votes you'll be fine. I still buy links but I purchase them purely for traffic. There is nothing wrong with this. All you need to do is make sure that all paid links include the rel="nofollow" attribute. This simply instructs search engines that the link isn't a vote and that it shouldn't carry any weight. - Matt
yes, it is paid link cause you paid for them! but here is the thing - does google know that you paid for them? you mentioned about the link sell section where people are selling links. if you look carefully, you will see most do not really post any URL of their site where the links are being sold on. you can only get the URL through PM therefore google doesn;t have any idea whether the links are paid not natural. i have seen good results with buying blog articles which is content based and serves the purpose of related links. buying blog post can give one good success if done right. one thing to consider when you buy blog article tho - never buy from a big network that promise to post your article on 1000 or so sites. most the the blog networks out there operate on one or two IPs therefore even if they post on 1000s of site, you are actually getting all the links from one or few IPs. make sure they have lots of class C IPS. more class C IPs, the better it is. Another thing to remember is that, posting on 100s or 1000s of sites can get you into duplicate content penalty if you just submit one article and they post it on all the blogs. see whether the network offers any article spin thereby posting each unique version on diferent sites.