Danny Sullivan: Links are a problem. Now we're getting link removal requests, which we (SEL) won't do. Why doesn't Google just disavow all the bad links (big applause).
Matt Cutts: This should be seen as a temporary market correction. Everyone's getting the message. You have to go after good links now. We're moving to a healthier world in search, spamming getting harder and harder.
Matt Cutts: People are now much less likely to want to pay for links. We've seen many sites go higher after they cleaned up and went white hat. They're finding it's more sustainable.
Audience alsow raised few questions
Question: Disavow links right away if I get a WMT message?
Matt Cutts: It's fair to your competitors that you do some clean up work before you disavow. Also just disavowing leaves a bunch of spammy links on the web. We want some help in cleaning up the web.
They are looking at ways to give more backlinks to webmasters, but that's still a ways off. they're concern is about black hat ways to abuse such a list.
Matt Cutts also confirmed that
We've seen many sites go higher after they cleaned up and went white hat
It clearly indicates that unnatural link removal and filing of disavow files in Google Webmaster Tools is working well
