(While there’s no shortage of coverage on this issue, many small business owners are finding themselves a bit bewildered by the whole paid links debate. This series is designed to help them understand the issues at play so they can make their own decisions about how to move forward in regards to buying, selling and nofollowing links.)

In the first article in this series I outlined the history of the nofollow tag. In the second article, I took a look at some of the complex issues in the “are paid links ok or are they evil?” argument. Today I’ll explore the options Google has in dealing with this problem and will explain why I think they’re taking the wrong route.

The FUD Effect

One of the biggest issues many have with the current paid links debate is the way in which Google has shared (or not shared) information with the public. Heavy handed tactics and veiled threats just don’t seem to match up with Google’s original “Do No Evil” philosophy.

In fact, folks like Michael Gray, Todd Malicoat, Ralph Tegtmeier and Aaron Wall have been referring to the way Google has handled things as FUD (the old sales tactic of fear, uncertainty and doubt.) I find it an incredibly accurate description.

So how does FUD work?

FUD is generally a strategic attempt to influence public perception by disseminating negative (and vague) information.

Google launched their FUD campaign back when Matt first started posting with the “suggestion” to use nofollow on paid links back in 2005.

Using nofollow is a safe way to buy links, because it’s a machine-readable way to specify that a link doesn’t have to be counted as a vote by a search engine.

It wasn’t long before Matt moved from making nofollow on paid links a suggestion to strongly encouraging it. A short while later, he was flat out asking site owners to submit spam reports on suspected link buyers and sellers.

Soon blogs and discussion forums were packed with terror stricken site owners who were convinced Google would “shut down” the traffic to their sites unless they obeyed the word from Mountain View. In fact, those outside the industry soon began making giant leaps in logic based on what they were hearing.

The recent David Airy incident is a perfect example of this. While David has some knowledge of SEO, he’s a graphic designer at heart, as are many of his readers.

Back in September, David wrote:

I’ve just removed what little advertising there was on my blog. The ads were shown below my category list, and included just four simple text link ads (two for print cartridge retailers and two for web template sites).

Why did I do this?

Google have been working behind the scenes, and I no longer rank highly in search results for design-related topics.

He went on to explain he’d spoken with several trusted friends and associates and had decided Google had probably penalized him for running Text Link Ads and also for running a contest that encouraged readers to link back to him with certain anchor text.

David ultimately ended up having a little back and forth with Matt Cutts in the comments area of Matt’s blog. David (and others) felt Matt was incredibly gracious in his efforts to help David “clean up” his site and regain his rankings.

Personally, I found the conversation to be more than a little disturbing.

After Matt pointed out the problems I mentioned above, David not only pulled the Text Link Ads, but proceeded to email everyone who had linked to him due to his contest to request they remove their links.

I asked everyone who entered to remove the links to my blog, and about 50 of them have already replied saying they will. Hopefully the others will follow suit.

In fact, David ended up writing the following on his blog post about reversing his ranking penalty:

I asked entrants to link to my website using specific anchor text, in effect, I tried to ‘game’ my Google search engine ranking positions (SERPs). This is known as ‘black hat SEO’, which, according to About.com, is “customarily defined as techniques that are used to get higher search rankings in an unethical manner.”

As I read those lines, I chuckled to myself. After all, David basically just said one of the oldest forms of legitimate link building (seeking links and encouraging good anchor text) was now being classified as “black hat seo.” Who knew?

The problem is, most of his readers took it literally. One asked if running a contest to encourage folks to use a badge created by his blog was “black hat.” Another commented he had no idea asking for certain anchor text was considered black hat SEO. Unfortunately, almost no one stepped in to correct these assumptions.

And we wonder why SEO has a reputation problem? The Google paid links debacle has people terrified of doing anything that might upset Google, even if we’re just talking about common sense marketing tactics.

Was David’s site really penalized for the Text Link Ads and the contest to boost back links? Perhaps. Only Google knows for sure. It’s interesting though to see most folks ignoring the comment on the original thread suggesting a 302 redirect might actually be the cause of the rankings drop. Far more exciting to believe Google was out to “get” folks. Of course Google hasn’t been doing anything to discourage that type of thinking. (This was a common problem during the sandbox hysteria as well. Webmasters often thought they were trapped in the sandbox when a little bit of digging often turned up other problems that may have been keeping them out of the index.)

So now Google’s FUD campaign has moved the average web site owner from thinking paid text links are bad to thinking paid ads that include links are bad to thinking incentivized links are bad and finally, that even keyword rich links are bad.

In light of the apparent slippery slope of Google’s definition of “bad” link building, perhaps I can suggest a change to Google’s Webmaster Guidelines.

The current guidelines include a section called “When Your Site is Ready” and includes a list of tips beginning with “Have other relevant sites link to yours.”

Perhaps it’s time to change that line to “Hope other relevant sites link to yours.”

Even with Google seeming to have declared all out war on paid links, the question still remained on how Google would handle the issue moving forward.

Devalue or Devastate?

Up until last week, most of the talk surrounding Google penalizing sites for buying or selling links was pure conjecture. Jim Boykin had an excellent post offering up his take on the David Airy situation and pointing out the lack of proof that Google was penalizing (rather than simply removing the ability to pass PageRank) sites for buying or selling links.

In my experience the only thing I’ve ever seen from google, as far as effect of selling links, is that Google may block your site from passing PageRank. Doesn’t hurt your site one bit, you’ll rank the way you always would…Google just don’t count your link love you give to other sites. (PageRank Block beyond your site). The ironic thing is that if you’re wanting to sells links, go ahead. The person buying them will probably never know if that links passes link juice to your site in the eyes of google, and it isn’t going to hurt you.

For the past two years I’d mostly been in the same camp as Jim. I assumed Google might filter out the impact of paid links or even “penalize” a site by removing it’s ability to pass PageRank, but I was pretty confident Google wouldn’t remove or demote sites in the rankings for the practice.

After all, when it comes to an issue like nofollowing paid links and ads, we’d be talking about Google hurting a site for NOT doing something. In general, Google penalties were handed down to sites that actively did something to violate Google’s guidelines.

Think about it. A webmaster has to actively ADD hidden text to their site. It’s a clear cut attempt to “game” Google and no webmaster is going to accidentally trip over their keyboard one day and generate a list of background colored keywords at the bottom of their page.

On the other hand, tons and tons of web sites and webmasters who know absolutely nothing about SEO sell ads and links on their sites to earn money. Many of them are probably blissfully unaware Google even publishes webmaster guidelines and an even larger percentage have probably never heard of Matt Cutts.

To punish them because they don’t know they should be reading what folks like Matt and Danny have to say about the issue is beyond ludicrous. As such, I had a hard time buying into the idea that Google would ever penalize the sites selling ads or links without using nofollow.

But then word came down that John Chow was given a Google slap for aggressive link building and things started getting a bit more hazy. What John was doing basically boiled down to a reciprocal link plan with targeted keywords in the anchor text. A penalty for that seemed more than a bit harsh, but it appeared to be what was happening.

Then Danny Sullivan posted last Friday with official word from Google:

Google said that some sites that are selling links may indeed end up being dropped from its search engine or have penalties attached to prevent them from ranking well.

Suddenly it didn’t matter what any of us had seen or experienced in the past or what we believed would happen. This was Google dropping the implications and “warnings” and flat out saying “refuse to nofollow and we reserve the right to drop you out of the index.

While many have said Google warned us this was coming, I’ll argue until the day I die that Google is out of line if they start removing sites from the index for failing to nofollow paid links.

Just Because You CAN Doesn’t Mean You SHOULD

Anyone who has read or watched Spiderman has heard the line “With great power there must also come great responsibility.” I’ll boil it down even more simply using a phrase my mom taught me.

Just because you can do something doesn’t mean you should.

I’ll be the first to admit Google is a private company and has the right to do what they wish with their algorithm and their index. I’ve heard quite a few people claim the government should get involved or that someone needs to sue for those lost rankings.

I don’t buy it. In my opinion, the day the government opens up the doors to sue Google for lowered rankings is the day the search industry goes belly up.

That said, Google doesn’t HAVE to penalize or drop sites to deal with this problem. Google’s engineers are intelligent folks. I have full confidence they could adjust their algorithm to find and discount the greatest majority of paid text links online today. If they can find them, they could simply discount those links. It would be the sensible thing to do.

Instead, they seem to be actively focusing on PENALIZING sites for these links. It’s so much more in your face. “We’re Google and we’ll do what we want!”

THAT, my friends is what has me up in arms.

Removing a site’s ability to pass link juice on those paid links makes perfect sense. Removing sites from the index instead of simply removing link power? That’s when I started believing Google was far more interested in sending the message “we will destroy you for daring cross us” than about protecting the quality of their search results.

Before you call me naive and point out that discounting those links would simply drive link buyers and sellers underground, let me make it clear I know this. On the other hand, Google’s staff has had a few too many special brownies if they don’t think penalizing sites will send buyers and sellers deep underground even more rapidly.

But That’s Not All

It’s a lot to digest, but this still isn’t the full story. Tomorrow I’ll explore the question many Google supporters are asking: “If you aren’t selling PageRank, why not just put nofollow in place?”

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