Eric Ward and I recently did a podcast about link building. In particular, we focused on personalization and Google's new spam reporting form moves.
Eric had some interesting points about the personalization movement at Google. At the moment, even with the new iGoogle announcement, there is no reason to believe that link building will fade into the distant past. In fact, it remains as important as ever. One example of this, is that Google does need to decide what to show someone that they are not currently familiar with (or who is not currently logged into a Google account).
Eric also believes that the degree of personalization will be modest. Most likely, we are not talking about a completely different set of results, but rather some tweaking based on what Google knows about the user.
This is consistent with the iGoogle announcement of earlier this week. In the press briefing on the topic, Sepandar Kamvar of Google indicated that they are looking to calculate PageRank for every person. The idea would be to use information that is known about the person (for example, their default Google Maps location, and their recent search history) as an additional filter on the search results.
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