With “monetize your blog / site” ads popping up all over the blogosphere, I’d just like to quickly point out that there might be side effects other than those usually associated with suddenly becoming rich. Consider what allegedly happend to MangoSauce (possibly NSFW): “Mango Sauce was penalised because I sold links through www.text-link-ads.com. A vengeful Google docked my “reputation” score thereby cutting referrals to the site by 75%.”
Now only Google knows if this is what actually happend, indeed there could be many reasons for being demoted on the search engine’s result pages, thereby receiving less traffic. However, while it seems to be unclear if selling links can actually damage your site’s ranking, Google’s disapproval of link selling has been very clear.
Note that I’m not saying “don’t do it” and I won’t even touch the ethical aspects of paid links. All I’m saying is “if you’re thinking about selling links, think twice, because there’s a chance your site’s ranking might suffer”.