What constitutes a "paid link"?

[stevecounsell]

I know that link building is one of the more important tools for great ranking and know that "paid links" may hurt a sites ranking.

How do I know if a company offering link building will be classified as "paid links"

[stevecounsell]

Thanks for your advice.  I've been offered link building by "Smart Traffic" in the UK.  Any experience of these guys?

[StalkerB]

Hiring a company to build links doesn't count as paying for links. However they will probably discuss a link buying budget with you and it's up to you whether to go with that or spend the money on other link baiting strategies.

Paying for links on good sites with relevent content is hard to detect, though not impossible. It's still against the guidelines and I wouldn't recommend it (well, in general but) unless you already have a strong link profile and were accumulating natural links at the same time.

Paying for links on low quality sites with irrelevant content will eventually get you penalised (or at least the links penalised).

Links for goods (such as giving a product for review) is a bit of a grey area and sponsored links (those given in an advertisment) should be marked nofollow.

Whichever company you work with should make you fully aware of their strategies and the dangers though.

[RyanOD]

Links are meant to be entirely natural and not influenced by the content creater. If you are exchanging something of value in return for a link, it's a paid link.

Examples of 'something of value' include: money, free goods or services, discount on goods or services, etc.

That being said, there is a lot of gray area here. If you link to a site and they link back, is that a paid link? If you pick up the tab at a conference and someone links to your site in their blog as a result, is that a paid link?

When categorizing a link as paid or non-paid, it is helpful to use common sense and think about intent. If it feels like you paid someone for the link, Google will probably think so too.

Consider reading these articles detailing Google's reaction to Overstock and J.C. Penny.