Link Exchange

Even new webmasters quickly grasp the importance of incoming links for building traffic and ranking in search results.  Links are fundamental to the operation of the Web, and everyone wants more of them.  However, the means you use to acquire new links can be just as important as the links themselves, and all links are not created equal.

Link exchange is one widely used method of acquiring links, wherein two web sites link to each other. It's a simple and apparently equitable transaction, but when  used without caution it can be hazardous to the health of your site.

The Good

Exchanging links can have beneficial results provided you link to revelant web sites that are likely to be of interest to your readers.  Your visitors benefit from access to additional resources they may not have been aware of, and you and your link exchange partner benefit from some additional traffic and new readers.

Don't try to stretch the definition of "relevant web sites".  If your site is about fishing, it's fine to exchange links with other fishing sites, camping sites, etc.  A link exchange with a car insurance site isn't a good fit, even if it's likely that most of your readers drive cars. Choose your links with your readers in mind.

The Bad

If your primary reason for seeking link exchanges is better rankings in the search engines, look elsewhere.  The major search engines rely on sophisticated algorithms that can easily pick up on this sort of reciprocal linking behavior, and links acquired thru simple exchanges are unlikely to provide any serious benefit to your site's ranking. And if you get really excessive with your link exchanges, things can get ugly...

The Ugly

Certain types of link exchange can actually have a negative effect on your search engine ranking, and in some cases even get your site completely removed from the search results. Don't believe it?  Maybe you'll believe Matt Cutts of Google, who in a May 2006 post revealed some reasons why a site may be dropped from Google's index.

Examples that might cause that include excessive reciprocal links, linking to spammy neighborhoods on the web, or link buying/selling.

From this statement it's obvious that Google can detect reciprocal links, although it's not clear just what they consider "excessive" (though I suspect it's a rather high number).  Even if your link exchanges don't fit the criteria for being excessive, you may still be penalized if you link to sites that Google considers "spammy".

Whenever you link out to another site, you are (to some extent) vouching for that site by indicating that you found it worth linking to.  If the sites you exchange links with fit the criteria for a "spammy" or untrustworthy site, some of that bad karma rubs off on you, and may increase the likelyhood that your site will be penalized.

Link Carefully

The promiscuous link-exchanger may find that all of those swapped links ultimately do more harm than good.  Luckily, a little common sense should be enough to avoid most linking pitfalls.  Keep the needs of your readers in mind and link only to valuable, relevant sites.  If you wouldn't link to the site without getting a link back in return, you probably shouldn't link to it at all.