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There is absolutely no way Google will ever be able to differentiate between paid links and those which occur 'naturally' (but then, are paid links actually natural links in the grand scheme of things? Should market pressures like this be able to influence search engines? Why not?).
This amuses and disappoints me in equal measure: Google seems to be able to set the parameters of the (digital) market in which we live, work and play as it sees fit. It could turn the rankings on their head right now and put a lot of very big companies out of business. They are a business owned by their shareholders, and this is their perogative.
Any calls to the effect that Google is 'playing foul' (not including you in this, Andy, since yours is a reasoned look at the situation) are pointless. Google makes the rules and the result of that is makes them for itself, too.
"Can we buy links now". Yes, do whatever you want. Google will do whatever it wants in return. You just have to decide whether you're going to dance exactly when Google tells you to.
At the end of the day Google sets the digital agenda. We know that and so do they. Ultimately they are a business that has to answer to shareholders and therefore like everyone else maximising profitability is their fundamental objective.
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There's no other way to get around it - the control of information on the internet is one of the most fundamentally important aspects of the internet age. Search engines are universally accessible portals to the compendium of human knowledge, and no one entity should be entitled to directly influence the flow of it. There are conflicts of interest at every single juncture, and your post points out a clear-cut one.
Of course, Google is a very enlightened company in a lot of ways. With great power comes great responsibility, and I'd like to think I can trust Google. Such is the nature of large, powerful entities, but it is our duty to keep them in check.