I agree -- I think its an issue of intention. When someone buys advertising, they are buying space on a website for a banner ad. That a thank-you link comes of it at the end of the month was never the intention, and in fact, is never guaranteed by the hosting blog.
On the other hand, paid posts (and to a lesser extent) paid links exist expressly so that links can be generated "organically" back to a site, which are surrounded by relevant and meaningful text (all things that matter SEO wise).
I'm wondering how much completely unacknowledged money changes hands. I mean, as long as the blogger *says* this is a sponsor or whatever, Google could potentially account for that... (I would hope it would get to that level of sophistication at some point, I'm sort of disappointed after listening to your description of how it really works -- seems rudimentary...)
P.S. if the blogger just links and says something like: hey, check it out! this is good! I like this! wraps it in relevant commentary and just "forgets" that he/she got paid by those people -- there is no way of accounting for that, as far as I can see... D.
Tony - actually, I think Google would argue it's not intention, but effect. I think intention is different, but also the effect of the thank-you posts is much less than the keyword-buying posts.
Delia - it can't be too much money. Google employees are perfectly able to infiltrate the link marketplace, and penalize anyone who buys links. Google's actions have put a huge amount of fear-uncertainty-doubt into the market anyway.
Seth: really? that's odd... Google is not exactly omniscient or... is it? :) You'd think they could set-up a "link market" Google couldn't infiltrate... D.
Delia, it's the same problem as with anti-censorship proxies - if the group gets big enough to have an appreciable impact, chances are that the authorities (the government or Google, as the case may be) will hear about it, and shut it down. Remember, there are a lot of Google employees, many of whom have blogs. So there's a vast pool of people to hear about any link-buying schemes.
if the problem is being big, wouldn't a host of small groups solve the problem? (you could cumulatively have significant impact without being detected)
how many Google employees are A-listers? (probably not that many and they could be "kept out of the loop" if you could track down their Google affiliation)
it's the A-bloggers that are really the problem, aren't they? I mean, a link from them is worth something -- what good is a link from somebody nobody's heard of? it may look like "activity" but it's really just meaningless noise, isn't it? D.
I still think that from a business perspective the two types of posts are identical to Google. What I mean by that is that TLA and their ilk are just easier to track down algorithmically than typical "Thank You" Posts.
Then again, I also think that if everyone added rel=nofollow to their links out for any site that may have paid them for that position, Google wouldn't give a hoot.
I don't think the conspiracy against Z-Listers is quite as bad as it looks, and I am always looking for a good conspiracy.
re: "I still think that from a business perspective the two types of posts are identical to Google."
well... they *shouldn't* be! (they are of very unequal value; so what if they are just as easy to track algorithmically? that's just a means to an end...)
P.S. ah, the time when I had no idea how it really worked:)... (not that I know a whole lot right now, but still...); they say if you like sausage, it's better if you don't know how it's made... (seems to apply to a whole lot of other things) D.