Matt Cutts posted an interesting post on his blog:

Clear disclosure of sponsorship is critical, and that includes disclosure for search engines. If link in a paid post would affect search engines, that link should not pass PageRank (e.g. by using the nofollow attribute). Google — and other search engines — do take action which can include demoting sites that sell links that pass PageRank, for example.”

We do take the subject of paid posts seriously and take action on them. In fact, we recently finished going through hundreds of “empty review” reports — thank you for that feedback! That means that now is a great time to send us reports of link buyers or sellers that violate our guidelines. We use that information to improve our algorithms, but we also look through that feedback manually to find and follow leads.

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