I wrote this article a few years ago, but it still applies. Anything other than sensible link exchange where you are thinking of the user experience, and NOT your site's optimisation - doesn't make sense. Anyway, here it is again to explain why:
Introduction - the link phenomenon
One of the important factors in ranking well on search engines such as Google is ensuring that you have a number of links pointing from other websites to your website. Website links can be a confusing thing, there are many terms used to describe them including one way links, reciprocal links, backlinks, inbound links but to explain what I'm talking about here - lets say you own ACME Shoe Sales, and you are on another website say www.great-aussie-footwear.com and you see a link that says "Visit ACME Shoe Sales" and you click on it - and it takes you to the ACME Shoe Sales, then this helps the ranking of ACME Shoe Sales.
This type of link is called an "inbound link" to ACME, or confusingly, is sometimes referred to as a Backlink for the ACME website. These backlinks or inbound links tell Google that someone else thinks that your website is worth linking to. If lots of people think your website is important enough to create a link to, then this tells the search engines that your website must be important. Fundamentally this is because when someone writes an article about your website or product, they often link to it. Google know about this phenominon (links which attribute you credit, or give you recognition for something), and so recognise it as a thing of value.
So how do you get these links to your website?
Well, there are many ways to do this including posting messages to forums with links to your website, listing your business in online directory websites, getting business partners to link to you, paying people for links (a risky practice these days), general off-line PR activities, and "Reciprocal Links" where you agree to link to someone if they link to you. This Reciprocal linking is also called "Link Exchange". Many people still exchange links with others hoping that they will rocket to the top of the search results because "their cousin who's an IT guy told them that was how to get ranked on Google".
Reciprocal links - will they help?
The answer is yes and no. A few years ago, reciprocal linking alone would get you ranked well on the search engines. The problem was that everyone figured this out and so many professional SEO companies abused the practice and setup massive reciprocal linking programmes - have you ever got one of those spammy emails from people asking you to link to them if they link to you? The practice is still alive and well. Given the disproportionate number of links that various websites ended up obtaining by the practice, the search engine companies caught on that most of this was an artificial practice, and they started to discount the value of links pointing to websites where that website linked back to the linking partner.
So they wont help?
The answer is yes, and no. There are two benefits you get from a link from someone else's website that points to your website.
a) Referral benefit
b) Ranking benefit
By this we're talking about the fact that if someone is on the other website, and they come across your link and they click on it - well they arrive at your website. If the place they found your link was on a site that is somehow related to your business (if you sell shoes, they may have been on an othopaedics website, or an price comparison website showing differnt footwear available for purchase in your country) then they may well be interested in shoes and so this could be a valuable website visitor. If they found your link on an online gambling website and clicked on it by mistake - well clearly there is limited benefit you receive from their visit.So typically speaking, referral benefit is strong when the link comes from a related website that is not competetive in your field (if you sell pillows, think bedding websites, if you sell tyres, think car websites etc)
Ranking benefit is what we discussed earlier where the search engines will recognise this link as a vote of your websites importance and give you weighting / ranking for this.
So back to Reciprocal Links - will they help?
The answer is yes and no....but this time, we'll try to really answer the question I promise! If a website owner approaches you who has a website that is related to your industry but not competetive to your business, and you think that people on their website may be the right sort of target audience who you'd like to have come to your website, then by all means exchange links with them.
Forget about the search engine ranking issues - if this business attracts people who are the sort of people who would buy or deal with your organisation (ie same area, same interests, same product category) then having a link from their site to yours has enough inherent value to exchange links. Same applies to whether a link should go on your website. Are your visitors going to find it interesting? Will it add value to their experience of your website? If so - go for it.
If a website from an overseas website approaches you but you don't sell to overseas customers, or if a website from an unrelated industry approaches you, then don't exchange links in the hope they will deliver strong rankings. On the issue of ranking, there is still much debate in the SEO industry about whether any rank is achieved from exchanging links. My personal view based on our SEO experience is that a small number of link exchanges with high quality "authorititive" websites in your industry will help to some extent. Be careful though, as linking out to a range of useless link partners who have sites filled with thousands of spammy links could actually hurt your rankings. If the person asking you to exchange links fits this category don't do it.
This article, was written by Phil Baddock, Salsa Digital's Search Marketing Director. If any of this didn't make sense, or if you need help with building high quality links to your website, Phil can be contacted on email@example.com , or read the Free Search Engine Optimisation (SEO) eBook.