There was a great article in the New York Times this week about how J.C. Penny was penalized by Google for purchasing inbound links.
Inbound links are links to your site. To oversimplify, the more inbound links your site has, the better your search engine ranking will be. However, Google specifically has a policy against companies intentionally creating (or buying) inbound links just to increase their rankings.
J.C. Penny claims that the links that were on paid “link farms” were not their doing and they fired the SEO company. Google penalized them by dropping their rankings, but they were not dropped from the engine completely — which is something that might happen to you or I if discovered using these techniques. Could it be because J.C. Penny spents $2.46 million a month on Google ads?
In any case, J.C. penny went from an average position of 1.3 on Feb 1 to an an average position of 52 by February 10. The moral of the story is that link farms are just not worth it. Google is constantly working on ways to reduce their influence on their ranking and if you get caught, the punishment can be severe.
Full article here: http://www.nytimes.com/2011/02/13/business/13search.html
