While I don’t sell paid text links on this site, but many people do. If you have a fairly high ranking site it’s a great way to make more money with your site than with Google ads alone.
The best way to improve your ranking with the search engines is to have high ranking sites point their text links to your site. High ranking sites are not in the habit of just giving out links to just any site, especially lower ranking or new ones. One of the best ways to get one of these links is to buy one on the higher ranking site, preferably inside their content.
As you may or may not know Google wants all website owners to disclose all paid links and insert a “nofollow” tag into the link so they know what it is and they will devalue the link. That will in effect remove most of the incentive for someone to buy the ad from you.
What Google is in effect saying is that we own “Page Rank”. Only we are allowed to use it as we please and if you try to profit from it (only Google is allowed to do that) we will punish you by lowering your rankings.
While that is their prerogative I have always believed that prohibition just doesn’t work. It just serves to drive prices up, especially for the small business website owner who won’t know who to turn to in order to buy these stealthly.
What many site owners have done is to take this practice underground. Unfortunately, Google may have turned this into a war and I believe it will always be very difficult for them to detect this practice, although apparently they will try and by doing that they also get “false positives”. I also believe that by devaluing sites that offer good content only to improve their own revenue will ultimately lead to lower quality search results and in the end be bad for Google.
There are already many good instructional posts to help site owners who want to get around this prohibition. One of the best that I have seen so far is by Jeremy Luebke on the Marketing Pilgrim site called “7.5 Rules of Selling Links – How Not to Get Penalized”. I’m also sure that there will also be more new and better ideas almost every day. I think that this is a war that Google cannot win.