tedster - 6:39 pm on Feb 14, 2011 (gmt 0)
I don't think it's a case of big brands versus little guys. I'd say it's MANUAL analysis versus algorithms. The reason JC Penney was hit was that someone first did the manual analysis and then publicized it.
A lot of members here do manual analysis, too and we see paid links all the time. Some of them certainly do seem to be "working", just as others seem to be having no effect.
Google tries to handle paid links by algorithm so they can have a solution that scales. So far that looks like a fantasy. Even if Google catches 70% of all paid links (a generous estimate), penalizing some and merely negating the ranking effect of others, that still lets a big batch of paid links into their webgraph, passing on anchor text and PageRank. The paid links market has not dried up.