There is a lot of talk these days about search engines devaluing purchased text links. To be sure, buying text links to manipulate one's Google PageRank or rankings in the SERPs is a widely abused practice that warrants attention from the search engines. The argument is that such attention is needed to ensure relevant search results dictated by natural, rather than artificial, linking.

On the other hand, link buying is a perfectly legitimate form of advertising that predates search engines. I hear that search engines are especially targeting sitewide links. Sitewide links are viewed as "unnatural" by the search engines and hence raise a "red flag". In fact, from an advertising standpoint, sitewides ensure the highest possible visibility for an advertiser's site. To the extent that search engines tolerate link buying for the sole purpose of driving traffic to one's site, it is odd that they should be targeting sitewides.

Matt Cutts had suggested using rel="nofollow" attribute for sponsored links. While this seems like a good workaround I wonder how many webmasters are aware that they should be adopting this practice, and, more importantly, how many of them are willing to sell text links that do not pass PR to their sponsors or help them in the search rankings. The rel="nofollow" solution will mean that site owners would have to charge less for text links, and now that advertisers are scared silly about buying text links, they would have to work harder to find sponsors. Site owners would now be in the business of strictly selling direct traffic rather than indirect traffic through SEO benefits. To attract sponsors, an unscrupulous webmaster might artificially inflate his Alexa rankings using one of the various scripts being sold on eBay. Who wouldn't want to advertise on a site that prominently displays an Alexa ranking of 5,000? Others will continue to game the system by coming up with new linking schemes that will take the search engines five or six years to figure out.

Then there's the itching suspicion of search engines trying to divert advertising dollars away from the text link market toward their own pay-per-click programs. Webmasters who spend $40,000 a year on Google Adwords and Yahoo Search Marketing may not be too pleased to learn that they can no longer make a few bucks selling links from their sites on which they've spent a fortune to promote. To the extent that search giants like like Google and Yahoo are in the business of making money, they would be wise not take overzealous steps to stifle the entrepreneurial spirits of the "little guys".

So, should search engines be cracking down on purchased links? Honestly, I can't answer this question with a "yes" or "no". Suffice it to say that link buying (and selling) is a complex issue that should be dealt with carefully by the search engines, given the complexity of the issue.