The removal of link ads may drive revenue up. Why? From an advertiser's perspective, link ads can be a low-cost and low-profile means to promote one's business. The low-profile nature of this advertising presence means that more ads are placed on a page at a lower cost. However, with link ads gone, advertisers will need to move to larger display ads.
Display ad units inherently use more real estate, and this will drive up the CPC and page RPM because advertisers will be competing for "real estate" on a web page in a way they didn't have to with link ads.
While the number of advertisers creating ad inventory will not change, the real estate they are competing for will decrease. For instance, instead of a website owner displaying 13 ads on a page (assuming they have three display ads and ten links), they will show, let's say, only four display ads. This reduction will drive up the advertiser's cost because it will be harder to move into web advertising "neighborhoods" without paying a premium price for ad space. In theory, this will increase bidding wars for the newly limited advertising space.
