The site Text-Link-Ads.com pretty much doesn’t appear in search results at all (except in a paid ad at the top of the results). So, it’s okay for TLA to be shown in search results only if they pay Google? Other sites, like JohnChow.com, have met similar fates, though Chow’s site may have been demoted for other reasons.
The original idea of TLA is interesting, though Google obviously doesn’t like it. Here’s my idea: Why doesn’t TLA start offering an option to sell links with nofollow attributes attached so no PageRank is passed-on to the advertiser? Google can’t complain about that, and we still get compact, unintrusive ads. Or does Google have another reason for trying to kill TLA? Could they be trying to prop-up their AdSense ad network?
Maybe Google needs to stop putting so much emphasis on links. They need to find more variables to factor-in to their calculations. Keywords used to be the largest factor in search ranking before Google came along. Nowadays keywords are of little importance compared to incoming links. Should incoming links meet the same fate as keywords?
The site penalties are not isolated to the TLA program. Selling any sort of link without an attached nofollow attribute could kill your Google search rankings.
It would be nice if Google got over their link addiction, but I doubt it will happen any time soon. I think that TLA needs to start using nofollow tags though. PageRank effects aside, TLA is a great idea. “Traditional” ads tend to annoy users, driving them towards ad-blocking software. Text links are compact and far from annoying. So, TLA, change the whole idea of your program. Go from “increase your PageRank” to “don’t annoy people with your ads.”