It was a very interesting day at the Search Engine Strategies Conference in San Jose. Google Government represented by Matt Cutts on one side and the search community at the other end.
Matt, in his usual style, blamed paid text links for polluting the internet and shared that Google uses a combination of algorithms and manual methods to detect [and penalize] websites that sell links.
But this time, Matt had some very tough audience including Michael Gray who put forward a very interesting case as to why text links are in Google's crosshair. Rand has a round-up of Michael's anti-Google argument:
Commercial websites are NOT generally linked-to naturally. Non-commercial websites are much more likely to entice natural links. [so commercial sites have buy links]
By eliminating paid links, Google will fill the top results for commercial queries with primarily non-commercial results.
Thus, when a searcher wishes to take a commercial action, the only relevant results will be the paid listings.
And, thus, searchers will be more likely to click on AdWords links, which earn Google money.
Lisa Barone, Barry Schwartz and Tamar Weinberg have excellent coverage of the SES conference at Bruce Clay and SE Roundtable respectively. If you are looking to improve your site rankings in search engines, digest each and every word uttered at the SES conference.
Related: Banned from Google for Text Links
Update: Added the SES Conference PowerPoint Presentation.