Why should I report paid links to Google?

Old
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Buying links in order to improve a site's ranking is in violation of Google's webmaster

guidelines and can negatively impact a site's ranking in search results.�

New 22 - 10 - 2007 (I think since July 2007)
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Not all paid links violate our guidelines. Buying and selling links is a normal part of the economy of the web when done for advertising purposes, and not for manipulation of search results. Links purchased for advertising should be designated as such. This can be done in several ways, such as:

* Adding a rel=”nofollow” attribute to the tag
* Redirecting the links to an intermediate page that is blocked from search engines with a robots.txt file

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