The idea of buying links goes as follows: among many other factors, Google uses links to determine if a website should be ranked higher on its indexed pages. The idea is that links are the relationships of the world wide web and the more popular your particular page is (because the more links it has), the more relevant it is and hence the higher it should appear for its targeted keywords.
Now what some people – and particularly SEO or Search Engine Optimization companies – offer and do is a service whereby they build dummy website that link to your site. In effect, they are trying to trick the search engines to ranking a particular website higher because it has links. By relying on these kinds of links, websites are disregarding the quality of the links, the sources, and the long-term impact it will have on their websites.
I liked Robert Guest’s Dallas Criminal Defense Lawyer Blog, wherein he talked about his experience with phony links and SEO companies. In one particular example, he discussed a spam comment that had been made under one of his blog entries. It turned out to be his own writing and it actually linked back to a prominent DWI law firm’s web site! What had happened was that a spam comment bot just copied and pasted his own materials in the comments, but then linked back to the law firm. All of this was done to trick Google to rank the page higher.
Another example I came across was more eye-opening. A blog in Lead-Gen SEO described how, in the summer of 2008, popular lawyer referral service FindLaw had been caught selling links to its clients in a bid to increase their search engine rankings. An email had been sent out – likely without being cleared by FindLaw’s inhouse counsel – that gave a message to the tune of “buy super-link-juice-passing text links from Findlaw and get top rankings in Google”. The big problem with FindLaw’s actions was that it was also selling web development services; hence, its clients may not have realized the risk they ran (i.e. in case Google decided to punish them) by engaging in FindLaw’s services.
Overall, buying paid links on dummy websites as a form to cheat the system is against Google’s Webmaster Guidelines. Google can (and probably should) be punishing those websites that engage in such conduct and put warnings up not to deal with certain SEO companies who engage in these depective practices.