I think in general this move might make sense, as those paid links do abuse the algorithm, so for Google to offer paid links beats the whole point of trying to make a search engine algorithm that would yield the best result. BUT, the way Google is doing this is outrageous. Some people make a lot of money from paid links, and that would be a problem for a while, but I trust the people will find the way to go beyond that. It’s a bit like the hacker/virus vs. anti-virus/security companies. The later can win a battle or two, but never the whole war.

I am personally overwhelmed by how Google is enforcing a change in how things are done in the web. I don’t think I’ve ever seen something quite like this before, either that Microsoft doing the same in the OS area. I believe in general Karma and honestly can’t believe they’ll be able to get away with something like this for long. Manual penalties? at least with Adsense they let you know what you’ve done and give you time to change that (3 days), but in this case – it’s all speculation based with rumors running around and general chaos. The whole way Google is doing this looks like bad news.