For those who didn't hear the news, a major change to the Google algorithm has punished blogs and sites that heavily cross link in networks. See more here. There are suggestions by some that the change is related to punishing sites that offer paid links, but so far the evidence doesn't support that. I've found a broad range of sites selling links who haven't had a page rank change, whilst a number of prominent sites which have never sold links have seen big page rank drops. The logical conclusion for me is still that this is about bulk linking.

For those unfamiliar with the process, it works a little like this.

You start a site or blog and build it up to a decent page rank. You then start creating new sites, linking out to these sites sharing some page rank love around. These blogs cross link, so the Google juice flows in all directions. How many blog networks (some big ones and most small ones) work is that they' keep on building new blogs, linking and cross linking. In theory (and it did work this way) you could get a small blog with little or no traffic up to a PR5 or PR6, making it valuable for text link sales, but no good for any other sort of advertising sale. I've built or been involved in hundred of sites that have used this exact model, and it was the easiest of things to do.

Screwed Economics

The problem with this model is that it rewarded lame sites that had little traffic. Sure, it was great if you were in on it but it really didn't really add anything of value to the greater community. Google has now said that enough is enough, Google will no longer reward poorly performing sites based on them being in what was basically a link farm. Given that nothing Google does can be applied with discrimination (on a site by site basis) we've seen huge sites such as Engadget losing page rank as well, even though they actually add value. In Engadget's case, they were part of the internal link swapping scheme of Weblogs Inc., which were really the first company to tap into this method in a big way (at least in the blogging space). Worse still, you'll see with Weblogs Inc sites that we not only see sidebar links, but links to multiple posts from many blogs across the network in the footer as well. Imagine these links over possibly millions of pages of content: that's how big the link swapping scheme is.

Content Is King

I don't think links, and in particular paid links are dead, after all Google still needs links to discover new sites and content to index, however the days of being able to build crap content and profit from it via advertising that relies on a high page rank are dead. Online marketers are left with a couple of options. Advertising is a definite option, and if you're content is not that good (or even MFA) Google Adwords is one solution. I'd also think that Text Link buys aren't dead: I've always bought text links that have an above the fold display anyway to get click traffic, and there is nothing from Google saying you cant buy links for this purpose, even if the Google juice benefits may no longer be there as much as they were previously.

The easiest path to success though will be good content. Content has always been king and although the long tail has sustained a lot of rubbish at the bottom the highest earning sites have always been those that provide good content, and subsequently have great traffic and can sell against this traffic. I'd think that the days of going wide for many may have passed, and we'll see a lot more people focusing on getting a smaller number of sites big, as opposed to having a wide spread of smaller sites.