Google Punished Paid Advertising?

It's been talked about that the October Google update hit sites selling links. But how?

Well there is a page on Google to report such sites. But could Google have really checked every one of these reported sites and included it in a bad list? Highly unlikely. This would be a lot of processing of exceptions, which I'm sure Google would prefer to avoid.

Instead they have probably done what they have done in the past when they found spam sites etc. They've studied the pages and decided what these guys are always doing that other pages don't always do. More to the point – what patterns do the links show that natural links don't show?

Well paid advertising links, especially in blogs, will be written into an advertorial. There will be an agreed number of links from the post to the advertiser. All of the links will be live – no redirects, no 'rel="nofollow"' tags etc. And if these links are for best SEO, then the link text will frequently include keywords.

Notice that last one, we're back to keywords in anchor text. Now, if what I talked about last week about my theory that Google ignores keywords in anchor text, then maybe I'm starting to see the light at the end of the tunnel.

Also badly hit were massive link directories. Google is known to punish link farms. And don't most link directories also use keywords in the anchor text?

If this is what is happening is this fair? I'll take a look at that later in the week.