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Referral links in book reviews are a problem because of the conflict of interest they create. If the author of the review chooses to put a referral link into it, they create a financial incentive to bias their own review in favour of the book.OK, some of my observations on the whole issue of reviews and criticism here:
1) Are referrals that different than the publisher advertising on the newspaper or magazine that reviews his books? Or if the author is a friend of stuff in the magazine, or even the reviewer? All the above have been going on for ages in the publishing world.
2) What about a site or blog that ALWAYS puts referral links to the books it reviews, whether the reviews are favorable or not?
3) What about a site that only posts about books they really like, along with referrals, and skip the ones they don't?
4) I think the presence of referrals and quality of the review are orthogonal. Not in the sense that a referral doesn't give a "conflict of interest" to the reviewer, but in the sense that you shouldn't judge good reviews by the presence potential conflicts of interests or not anyway.
5) There is only two ways to know if a review is any good.
The absolute way: read the book yourself and compare to the review.
The faux-bayesian heuristic way: the critic has a consistent track record in his other reviews that tells you that he is good and honest.
6) That said, I think there is also another way. If you read enough reviews, you get the ability to judge the review itself in a meta-level. So much, that you can get useful information about the work reviewed out of it, regardless if the critic is good/honest or not. And I think this meta-reading of reviews is the more important skill. Never trust the review completely, judge it and take the information that you need by also reading behind the lines.
A simplistic example: maybe a review of a programming book is horrible (and paid by the publisher) but it gives code examples used in the book. Just looking at the example code you can tell with some certainty if the book itself will be a disappointment or not.