[Hostnetric]

Paid links can give you a traffic boost to your site quickly if they are on sites that are related to your topic. This can have a beneficial immediate effect to your bottom line and can result in your site becoming popular.

You are right in thinking that paid links do not carry as much weight at natural links.

You should run a mix of both your idea and his. The article submissions, a company blog and other expert material that people will read and use virally on the net will help you build your serp rankings and eventually your traffic flow.

The paid links can also result in natural link backs as well if you provide a good product and also quality content that others would find helpful. People will visit your site and link back and suggest it to others also resulting in natural links to your site.

So my arguement would be that you conduct a mix of both strategies.

There are many other strategies that people use and there are some really smart SEO people on these forums that can give you even more information and advice on this than I can.