Google spam czar Matt Cutts is weighing in on "sponsored conversations" which is a fancy pants way of saying "paid posts." This is where bloggers are paid by companies to publish a favorable post about them.
Matt Cutts says Google will punish bloggers who pass page rank to the links included in paid posts. However, it's ok to have the paid posts - just include the "nofollow" tag on the links. Make it clear that it's a sponsored posts by labeling it as such for the world to see.
Why the big fuss? Cutts makes his point with an example post about brain surgery. If a company pays a blogger to write a favorable post about their brain surgery tool in order to rank higher, that's a serious topic to be messing with the search results about.
Of course, the problem could still exist as the company could still rank higher with legitimate SEO means, though such efforts are tougher.
For now, the nofollow on paid posts is the word from Cutts.
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