Part 1 talks about “nofollow” tag and its origin while the Part 2 talks about Google’s new policies of using it.
In my post earlier about Google banning paid links in July, I’d shared similar thoughts on paid links.

I agree that humans should be informed if the product review is paid or not, if the promotion of the third party is being done because you’ve been paid to do it or because you really are recommending it.

But I do feel Google’s going a little overboard with this. Below is what I copied into Jennifer’s comment box as well:

Webmasters have been buying and selling links before Google was even born. It was the very exchange of links ( I’m surprised it was assumed all links were “unpaid for” links when PageRank was invented), including the buying and selling of links that resulted in an algo that is treating links as a voting mechanism. After Google, reciprocal linking became even more aggressive because webmasters realized how important these links were to Google. Soon, reciprocal linking changed to paid links and three-way linking, all methods of link bargaining for webmasters targeting Google rankings. And it worked. I’m sure it still works and thats why now Google wants paid links to be punished – but how exactly will this stop webmasters from running after the rankings. And really, its about rankings, not PR. There are many websites out there with excellent PageRank and no rankings.

There are rarely such cases who only buy links for PR – everyone wants traffic – the whole objective of wanting to rank on Google is to get traffic. Then when a website is getting traffic from another source, why will it not want to? If a PR 6 website is giving a text link for $50 on its homepage, and has some xxxxxx v/m, why should that website not charge. A usability study shows that a text link gets more the click-throughs than an image ad. Then why should ads be just converted to images?

Those who really do it only for PR and not traffic, will figure out a way to beat this too. Many of the genuine cases will suffer (ok, I posted “only genuine cases will suffer” in the comment – but sense has prevailed ).

• Traffic of your website – the lower the Alexa ranking, the higher the price.
• Link popularity of your website – the more links (and more quality links), the higher the price.
• Theme of your website – there is more demand for some themes than others.
• Number of links to be sold – the fewer the number of links on a page, the higher the price.
• Sitewide or single page placement – “sitewide” vs. on a single page of your website (slightly more value given to links that appear sitewide).
• Location on the page – more value when the links are placed in an area where they have the best chance of being clicked.

Check out this tool at Text-Link-Ads. Read more about the tool at their Blog as well.
Another great innovation by Patrick Gavin’s team!