Google does not want paid links to be counted by the search engine as "recommendation" links that change the Pagerank and reputation of the page that is linked to. When Googlebot can crawl sponsored links, Google calls it "link selling". Google is willing to apply penalties for link selling that include:
- Lowering the reported Pagerank for the site in the Google Toolbar (to make the site look less valuable to those buying links.)
- Making the rankings in the search results worse for the site selling links.
- Removing a site entirely from the Google search results
Here is an article that discusses link selling and its penalties.
When you have sponsored links on your site, Google wants you to take steps to ensure that Googlebot does not crawl those links and view them as your endorsement of the site being linked to. Technical measures that can be employed are:
- Serving the ads with JavaScript and blocking those scripts with robots.txt.
- Using
rel=nofollow
attributes on each link to prevent them from passing Pagerank.
- Redirecting links through a tracking script which has a URL that is blocked in robots.txt.
As Google notes in their document, you don't have to worry about this with most ad networks such as AdSense and DoubleClick. They handle the required blocking for you. They use a combination on the techniques -- the ads are served via JavaScript then the JavaScript code to serve the ads and the ads themselves are listed in robots.txt.
The only time that you really need to worry about this is if you are selling ads yourself and directly linking to other sites.