There are many different companies out there selling text links. It is a very profitable business for both the publishers and the advertisers.
As advertising sources shrink from television and radio, more and more people are seeking new ways to promote their goods and services online. If you own a website, you can have people paying you to add one-way inbound links to their sites from your site. Also, you can pay others to put up your links on their sites.
Google does have some ways to discern many of the major companies’ links that sell text-based links, but it doesn’t stop people from buying them. In addition, Google also is thinking of selling its own text links now (in addition to their Adwords program), and their algorithms are set to ignore those links when establishing a site’s reputation. So, it’s not the text-based link advertising concept they are unhappy about, it’s the fact that they tend to discredit the ranking by letting people pay for a good reputation.
