Recently there has been a bit of fuss from Amazon about companies offering to post paid for reviews on their site; although these in particular were related to electronic and consumer goods there are services that offer to post reviews of books for money too.
I can see the attraction. Good reviews equate more or less directly to sales but clearly posting reviews that are good because they are paid for skews the system and if ultimately the product is poor there are going to be disappointed consumers (who probably won't buy the same brand/author again) and also the manufacturer/author misses out on valuable feedback if the reviews are not genuinely balanced and objective.
I'm also sure that for books there would be enough people who would review for free; the obvious limitations with this approach is finding people willing to write reviews (and from comments from authors I know they are few and far between and they value everyone who does) and that each person can only write one review (even if that can then be posted on multiple sites). Of course there could be negative - even hostile - reviews too but they are a separate issue and if they are genuine then it has to be accepted that you really can't please all of the people all of the time. Some authors revel in their one star reviews and accept it is part of being published.
Treading a middle line here are people like me who are given books for free to read and review, where the book would normally cost money. Now the obvious criticism here is that this is tantamount to paying for the review. Even if the book would cost less than a pound/dollar to buy from Your Favoured eBook Retailer there's still going to be concerns that this is going to skew the review to be more positive. Of course the obvious benefit for an author is that these reviewers <i>will</i> post a review with (hopefully) critical merit and giving others an insight into the work.
I hope this isn't the case - I certainly don't automatically give good reviews because I get the book for free. I judge each book on its own merits. It is true that posting a unconstructive negative review is harder when you have been sent the book. But as unconstructive negative reviews are not helpful to anyone this is probably a good thing. Providing constructive criticism, in my experience, is actually welcomed by the author. By and large authors are striving to make the next book better than the last so any advice the readers can give to help is useful to them.
But paid for positive reviews are just as damaging as the negative ones in the long term for exactly this reason. If every review is 5 stars and finds no faults then it doesn't help anybody and leads to a poorer product over time.
I'm guessing that the paid reviews are (mostly) the domain of the commercial product manufacturers rather than authors. But even so I doubt the short term gain offsets the long term damage. Instead honest reviews, either from purchases or items given to specific reviewers, whether good or bad, are the only way to retain a healthy market.