Yesterday, Google's Matt Cutts posted a detailed videotrying to define how Google's manual spam fighters determines what is a paid link versus what is not.
Now, 99% of the time, Matt Cutts said it is clear if a link is paid or not. It is a clear transaction that the link on a site was paid $X for. But sometimes it is not clear. Matt summarized it on Google+ these are the other criteria Google uses to determine if a link is considered paid or not. Google asks these questions when looking at a suspicious link:
What is the value of the gift, product, or service?
How close is the gift, product, or service to actual money?
Is it an outright gift or a loan?
Who is the intended audience?
Is the intent of the gift to get links?
Would the gift be a surprise to third party?
Here is the video:
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