Aaron Wall caught Google buying paid links and reported it yesterday. Danny Sullivan did a deep dive on this campaign, concluding the only purpose behind it was to get links to try to "influence rankings" of the search results.
As you all know, paid links in this fashion is against Google's terms of service.
So what happened?
We are not a 100% sure yet, nor do we have any statement from Google on this, but it appears that Google hired a marketing company to run a campaign to promote their browser, Google Chrome. One of the marketing company's, Danny Sullivan thinks it is Unruly, paid bloggers with a $40 Amazon gift certificate to write sponsored posts on Google Chrome.
The thing is, this campaign not only was about paid links in sponsored posts but also generated a tremendous amount of junk content indexed by Google. The same content Google is trying to get rid of with their search algorithms.
That being said, Danny and Aaron do an excellent job uncovering this case and picking it apart.
We still do not have any reason or explanation from Google. I suspect they will end up banning their Google Chrome page for the next month or few. Just like they did when Google penalized themselves for cloaking AdWords help, cloaking AdWords support and the Google Japan PageRank penalty.
The folks at WebmasterWorld are not surprised anymore. Google is huge and one hand doesn't communicate with the other, especially for third-party marketing companies. It will be interesting to see how Google responds to this.
Forum discussion at WebmasterWorld.
Update: Here is a statement from Google:
Google never agreed to anything more than online ads. We have consistently avoided paid sponsorships, including paying bloggers to promote our products, because these kind of promotions are not transparent or in the best interests of users. We're now looking at what changes we need to make to ensure that this never happens again.