After reading about the paid links issue in Matt Cutts blog and Digitalpoint Forum. It seems that paid links will no longer useful for Google SEO in the future as Google is going to change their ranking algorithm to make sure that paid backlinks will have not effect to Google ranking. Google now tries to figure out how to separate paid links from natural links and they also allow anyone to report paid links to help them distinguish paid links and natural links.
Furthermore, Google will take action against on websites that contains a lot of paid links. And for websites and bloggers that sell text links, here's what Matt Cutts, Head of Google's webspam team advices:
" If you want to sell a link, you should at least provide machine-readable disclosure for paid links by making your link in a way that doesn’t affect search engines. There’s a ton of ways to do that. For example, you could make a paid link go through a redirect where the redirect url is robot’ed out using robots.txt. You could also use the rel=nofollow attribute."
Google will make SEO harder. If you frequently buy paid links to boost your Google ranking and PR, I think you should stop now to avoid your site or blog penalized by Google.
Payments to webmasters and bloggers for a text link appears on their sites and blogs are definitely considered as paid links. For paid directory listings, there are still no clear specifications whether they are seen as paid links. In my opinion, they will not be considered as paid links since Google and Yahoo also have their own directories accepting paid listings. Can we report them paid links? For blog sponsor posts from reviewme.com and Payperpost.com, they are likely to be treated as paid links as well since one of the goals of Google is to stop people from using unnatural backlinks that can artificially boost up their websites ranking. The devaluation of paid links by Google will sure affect the ways webmasters make money online in the future.
To get traffic from Google and make money from your website and blog, I think the best ways now is to make sure the majority of your links are natural, continue to grow natural and relevant inbound links and update your website or blog often with unique and useful content.