There are many different ideas about how you should use links to increase your search engine ranking. Some say reciprocal linking (or link swapping) is bad and does not help or can even damage you rankings and others will say it is a good thing. Others will only use 3 way linking systems. Some say that incoming links should only be gained naturally by other website owners linking to your site purely because of the useful content you have. You can increase this by making sure your site contains useful unique content, (sometimes referred to as ‘link bait’). Generally you will want to speed up this process by finding your own link partners.
The way I see it is that one way links are preferred but it is the quality of the link that really matters. Exchanging links with a good quality site that is relevant to your site with the correct anchor text can be more beneficial than a one way link from a low quality site. Google places a lot of weight on your websites incoming links so you need to make sure that sites that link to you are the type of websites that Google likes. Nobody knows exactly how the Google algorithm works but as Google is always trying to improve the searchers’ experience you need to think what would be good for them. Linking with relevant websites that your visitors would also be interested in could only be a good thing.
What type of links should you avoid?
As relevance is highly important, exchanging links with “link farms” will be no good at all. These types of sites will mix all types of links together on one page so the page will have no clear theme. On the other hand exchanging links with structured directory sites can prove beneficial. For example, Google’s favorite directory is the ODP, dmoz.org. If you have a link to your site in this directory it will most probably improve your ranking. It may take a long time to get listed as it is a human edited directory but it is free so well worth adding your site.
When gaining links from other sites you should focus on authority websites that have relevant content. As well as directories, links from related blogs and forums can be useful but be aware that a lot of these sites have ‘no follow’ set on their links which means that the search engines will ignore these links and therefore will not help your rankings. These links can still be of benefit as humans may follow them to your site. Other places to get links from are article sites and social bookmark sites but beware that these also use ‘no follow’.
In conclusion, reciprocal links are not all bad, if used correctly, they can improve your search engine rankings.