Google dictate "no-follow" for ALL links from compensated content?

If you're at all concerned about Google's "punishment" to bloggers who post sponsored content, you really need to read this post by Ted Murphy on the Izea blog (Izea owns Pay Per Post). In this post, Ted explains the discussion he had with Google's Matt Cutts earlier this month at PubCon, where they talked about using "no-follow" tags for links in sponsored content.

Although Izea how now decided to require "no-follow" for all links to an advertiser in posts made through SocialSpark. However:

Matt commended the decision, but then added ALL links inside of any sponsored post should carry the no-follow tag period, regardless of whether they are required, not required or even link to the advertiser paying for the post. (Ted Murphy)

Yikes, Google really are getting serious about this now!

Andy Beard has followed up on this post with a really great article about the ramifications of Google's decision, which I strongly suggest you read if you have any concern about paid content and the perils of followed links.

While I do no sponsored posts here at Blogger Buster (or indeed any of my blogs), I am now rather concerned that any advertising I choose to feature in my blog may eventually subject me to Google's wrath, as I'm sure many other bloggers are too. Does this mean that all bloggers who receive any sort of compensation from their blogs should insert "no-follow" on all outgoing links to be absolutely certain that we don't incur Google's wrath?

I certainly hope not! For me, this would undermine one of the core principles of blogging: the ability to link to between blogs, create dynamic content and a generate a sense of community which the search engines pick up on and deliver to the internet as a whole.

As Andy rightly puts forth:

This really is looking less and less about the quality of search results, and more about the failings of Google's algorithms.

I sincerely hope that Google's Webmaster guidelines are soon updated to include a clear and concise explanation of the way Google expects us to link to other content in our blogs without fear of losing PageRank and search results status!

I know that many of you believe that links in paid posts should not be followed by search engines, but I honestly believe that such drastic restrictions on links which can or can't be followed will eventually affect any blogger who has ads or is somehow compensated to blog. Please do let me know your opinions on this matter by leaving your comments below.