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Do text link ads, like the ones from text-link-ads.com act as backlinks ? Surly they work as normal anchor text, but are search engines wise to this technique and just not count them ?

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Sure it will act as back links ,even you can sometime see in google webmaster tool as back links but BEWARE . Google will punish you for excessive paid back links or link exchanges .

this what google say about paid back links

" Buying or selling links that pass PageRank is in violation of Google's Webmaster Guidelines and can negatively impact a site's ranking in search results."

so if you are looking for better Google ranking or Google's page Rank better stick to normal and safe way to build genuine back links from high rated websites and from sites which have better page ranks .

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surly that stance from google is open to HUGE abuse, i could just build thousands of 'spammy' links for my competitors to get there rankings reduced ? – sam Jun 3 '12 at 16:04
@sam are you talking about " Negative SEO " – panindra Jun 3 '12 at 16:07
i havnt come accross the term "negative SEO" before - is that where you build links to sabotage a site ? – sam Jun 3 '12 at 16:11
@sam yes - it is very negative way to improve your site ranking - unethical technique to improve your own rankings by downgrading your competitor’s sites – panindra Jun 3 '12 at 16:14
how can you protect against it, if someones "attacking" your site with negative backlinks ? – sam Jun 3 '12 at 16:15
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