Would it be possible for search engines to penalise websites displaying affiliate links? Would they want to? Should they?

I was looking through a links directory on one of my sites (Janric) to see how it had faired after the recent Google page rank changes and I noticed the page ranks varied from page to page.

Nearly all of the pages were created on the same day but some have loads of links, others not so many. All of them are linked to from the same directory page. I'd expected them all to be equal.

Most of the pages were page rank 3, but a few were page rank 2, so I decided to investigate. At first I though it was quantity of text or links on the page, but one of the lower ranking pages had only a few links, another was quite full. But there were both fuller and emptier pages with the higher page rank. So content size wasn't the problem.

Then I made a discovery - all of the page rank 2 pages contained affiliate links. Links I'd put in place to add a bit of content when I first created the pages and to try to add a small amount of extra commission. Could affiliate links realy be damaging my page rank?

Another site I run, RealWebTraffic has a similar links directory, built around the same time. So I decided to check that. This also had a variation with page ranks, but some of those containing affiliate links had the higher page rank. Theory blown?

No, the lower page rank pages had affiliate links, but the affiliate links on the higher ranking pages were "hidden" from the search engines.

Not conclusive proof and in no way hard evidence, but take a look at your own site if you are using affiliate links and consider masking them from the search engines - your page rank might just thank you for it.