Its been almost a week now that the issue of crack down by Google on sponsored posts publishers and advertisers has created much a hurricane,so I thought I must consult an expert regarding this so that he could elaborately explain on the issue.Down here I am posting his reply, I hope it will help all you bloggers who are still perplexed over the issue.
There are 2 issues -
1. Taken by people on moral ground. ..
the purpose of a blog is to give views without any external influence, it can be biased based on your outlook or experiences,when money is involved to write blogs for a product/service, the blog cannot be trusted.Now here is a cycle, You will get payed by sponsors for writing blogs based on your ranking, You get blog viewership based on your views and peoples trust on you
once people know that you blog for money. people stop trusting you or visiting ur blog your ranking falls and advertisers are not interested in asking you to blog for them. If you do not very openly disclose that this is sponsored blog, you are cheating the viewers the moment you declare that , people wont be interested. There are legal sanctions which require disclosures to be in place.
2. page ranking issue...
if Google fears that the advent of such blogging will result in incorrect page ranking, and this affects their credibility, they may want to take action, they would also look to kill 2 birds with single stone; Stop this blog for money trend as well as save the effort that goes into modifying their algorithm to accommodate for these blog based links. I am not commenting on what Google did was right or wrong.They are not directly attacking any sites which has links , they are attacking a particular problem which affects the credibility of their patented page rank system.