You are very misinformed if you think these strategies do not work. They are a necessity for a startup in very high competition niches.
Take a look at the source of the very reputable: www.usatoday.com/sports/ and search for "NFL Tickets". Blatant link buying by vivid seats. SeatGeek does this all over the place as well. When you have really strong competitors buying links like this and getting away with it--it's the only way to compete.
In my experience Google has never penalized a competitor for doing this in my niche, therefore to compete I have to do it as well.
What Rapgenius is doing is very innocent compared to a lot of what is going on out there.
Although I don't agree that "What Rapgenius is doing is very innocent", I do have to agree on the general (black) SEO tactics that startups do, and even blue chips do.
This is my first hand experience: I was contacted by an "SEO Consultant" who wanted to publish an article in one my sites for $40. I went along, exchanged a few emails, and managed to get the "article" this company wanted to publish.
Bottom line was that they wanted to place link's to Tesco's LED bulbs site:
Text: decorative and useful living room accessory
URL: http://www.tesco.com/direct/home-garden/lighting/cat3376614.cat
I didn't say buying links doesn't work. I said asking for a series of exact match anchor text links, on the bottom of a blog post on a site that is likely irrelevant, is very unlikely to work.
More importantly, any strategy that is against Googles quality guidelines that works today, probably wont work forever, or even for another several months. The pain and suffering of getting slapped by google is much too intense to justify the short term gains.
You're giving Google's algorithms way too much credit. The exact strategy you described still does work--and that's really the sad part.
That's why Google has to have these scare tactics to stop people from doing them. If they didn't work then Google and you and everyone else who's up in arms over this would just ignore these links.
I can guarantee you that if you do a backlink analysis of everyone ranking ahead of rapgenius for these search terms they will have thousands of these types of backlinks.
My experience differs. Odds are, even with all those spammy links, there are thousands of legit links. Many of those links are probably discounted by Google.
I definitely agree that Google wouldn't be so vocal about buying links, if it wasn't a real threat to the quality of their SERPs.
That being said, this particular strategy from Rap Genius most certainly does not work. There are just too many obvious signals that those links are unnatural.
Why not go for the single link, in content, without exact match anchor text, with content near the link with the text you want to rank for...
If you're gonna ask bloggers for links, start with legit outreach strategies, why open with an obvious barter. I bet broken linkbuilding http://www.brokenlinkbuilding.com/ is a treasure trove of opportunity in the lyrics vertical. or simple Start with just sharing great content that is relevant, and nurture relationships with bloggers. Why buy them off, when you have such a great web property?
You can report them using Google Webmaster tools. I have done this for several sites, but the link buying & ranking within Google continues. The system is broken.
Take a look at the source of the very reputable: www.usatoday.com/sports/ and search for "NFL Tickets". Blatant link buying by vivid seats. SeatGeek does this all over the place as well. When you have really strong competitors buying links like this and getting away with it--it's the only way to compete.
In my experience Google has never penalized a competitor for doing this in my niche, therefore to compete I have to do it as well.
What Rapgenius is doing is very innocent compared to a lot of what is going on out there.