Finally the story makes the New York Times:

It may be the worst-kept secret in the Twittersphere. That friend who brags about having 1,000, even 100,000 Twitter followers may not have earned them through hard work and social networking; he may have simply bought them on the black market.

And it’s not just ego-driven blogger types. Celebrities, politicians, start-ups, aspiring rock stars, reality show hopefuls — anyone who might benefit from having a larger social media footprint — are known to have bought large blocks of Twitter followers.

There is very little "benefit" from having a "larger social media footprint".

Still.

71% of Lady Gaga's 29 million followers are fake.

70% of Obama's 19 million followers are fake.

And so on.

Im waiting for Bieber to have more twitter followers than the entire population of the world.

Well, first Twitter would need to have more accounts than the entire population of the world.

And that's not happening anytime soon. :)

Last startup several people we knew discussed purchasing likes or followers.

It's social proofing/signaling. That's basically what it's good for.

I'm not convinced that social proof actually works. :)

You'd have more experience than most! I think it works to a certain extent and depends on the level of experience of the other individual / party. The less experience, the more social proof is effective.