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The 3 things google ranks a site on are quality, relevancy and popularity.
Each backlink to a site is classed as a vote for that site in the serps so obviously, the more backlinks/votes the higher the ranking and PR.
Theres more to it than that but that's the basics.
The thing is, we don't have sponsored links to vote for them and google will see it in the same way, so that link is boosting the popularity of that sponsor site for the wrong reasons.
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