Google requires people to voluntary report such text-link ads in their spam reporting form. They say it is a great way to get information from people to improve their results. You can kill your competition if you can show proof that there is paid link and it does not have the "ref=nofollow" included. That would be awfully cowardly, mean and especially evil.
According to the original post, PageRank is an indication of usefulness of the webpage. They don't want paid links to be counted toward PageRank because it deceives its purpose. If no one reports anything, it would be fine. If Google decided to enforce this policy a lot of people might get their PageRank and link in search engine taking put way in the back. To make things clear, they are not against text-link advertising, but just requires the nofollow tag so it does not count toward PageRank.
I guess a lot of people have been reporting paid links that counted toward PageRank because they made a special form just for reporting paid links. They will be modifying their algorithm again due to this suppose problem of many haters. The reports they receive will be used to modify the algorithm for determining PageRank and search results.
If you are selling links for advertising purposes, there are many ways you can designate this, including:
- Adding a rel="nofollow" attribute to the href tag
- Redirecting the links to an intermediate page that is blocked from search engines with a robots.txt file
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