Matt Cutts, the Google head of search spam, recently released a detailed video that involves the criteria by Google Web spam team - to determine whether a link is considered a paid link or not.
Five basic criteria are set by the SEO team - are supposed to be used by Google in link type determination. While the first one is quite obvious, others are relatively less obvious.
1. Explicit Link Sales
The most obvious links are those that are explicitly sold for money. A webmaster sells certain link to another webmaster in exchange for a specific payment in dollars. This is the most clear and common example of a paid link according to Matt.
2. Close to the Value of Money
The next criterion that is less obvious is how close the value to money is. A free gift online or free online trial to software is always less value to users than a gift card worth some dollars.
3. Gift vs. Loan
There is a huge difference between gifting and loaning. Generally, companies loan a tech reviewer a device or car or something in order to properly review the item for them. However, if the item is given to them forever and never asked them to return it, then it is much closer to a paid link than a loan.
4. Intent of Audience
This is an important criterion of determination. To give an example, when you go to a SalesForce conference and get a free trial of the software, then it's usually not in exchange for a link. Similarly, when Google gives away a free Nexus 7, the intent is not regarding links but about the developers working on apps for that device. However, if you give away laptops at events and then expect bloggers to link to you in exchange, then this is a bad intent.
5. Surprise or Not
If you are a movie blogger or reporter and are supposed to write a review on a movie; you might be given free access to the movie. However, you won't be surprised by this free access but if you are given a free car or laptop or some other gift in exchange for writing a review, that would definitely surprise you. This is the final criteria of determination.
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