> isn't link-farming frowned upon by Google's search algorithm, which tends to cut off such activities at the knees by burying sites that engage in it in the search results?
yes, it is. scroogle for "wordpress hot nacho ~scandal". that endeavour got some loving justice from Goog, and wordpress.org had a PR of 0 (zero) for some time, which meant they've been effectively removed from Google search results.
there's a subtle moment: at that incident Matt was running 3rd-party (not Goog's) ads; since that time Automattic took a lesson and now acts much smarter -- this time they are a rather big customer of Goog itself. anyhow, this can't last forever as even Goog has competitors and also because of all that PR stuff, you know.
.
> it's normal for the WP tag pages to outrank your own blog unless it's exceptionally popular.
this is essentially the same thing as to saying:
"it's normal for any copy-scraping site / splog to outrank your own blog unless it's exceptionally popular."
good examples are: wordprexy, wpfind.com, etc. extremely "happy" wordpress campers reactions to such "outrankings" can be found right on this forums.
btw, even Technoraty or other tag-aggregators don't require you to link to them as 'rel=tag' (and ping) is pretty much suffice test to be present in their listings. not so about wordpress.com Global Tags where you're forced to pass away your links and deprived of opt-out opportunity.
.
> This is a benefit, not a loss.
which benefit, for whom?
I bet any blogger, regardless of where they are at, would rather prefer to see direct links to their particular blogs in the search engines results pages, instead of links to any higher ranked tag aggregator/link-farm, which may bury their posts on the 173th page of the 'zeitgeist of what popular in the last 48 hours'.
you know, some tags are so stuffed with a 'fresh stuff', that a visitor who is looking for the particular search terms, which may even stand for your entire blog-post title (as in the OP example), just won't be able to find this post in question out there. most likely, he'll have to land to another (similar tagged) .com blog, but once again: whom it's advantageous/profitable to then?
.
> Those WP tag page rankings are rankings your blog would not otherwise have gotten, generally speaking.
guess there's a typo by inclusion in this sentence. particularly speaking, it must be read as:
"Those WP tag page rankings are rankings your blog would otherwise have gotten."
no doubts, the cause of that typo is an excessive drinking of the Atomattic's Inc. Kool-Aid (tm), but that's just so typical for the fanboys, so I'm not surprised at all.
regardless of whatever product/service they consume or use, fanboys usually tend to totally associate themselves with that product/service said and defend it (also regardless of its quality), because otherwise they'd feeling themselves so silly and out of the flock -- "if I'm a user of the not so cool product/service (which everyone of my flock is using too), then I must be not so cool as well".
.
"Four legs good, two legs better!"
-- George Orwell, Animal Farm