Link exchanges started in a time when search engine weighting algorithms could be described as little more than rudimentary. Spamming was hard to detect, let alone penalise. Link building was the one and only effective SEO exercise during this period. From that sentiment grew an industry of easy linking solutions. Most of them completely unethical.
Link exchanges were one of the first ideas sites came up with, and they worked like this:
A group of two or more websites come together and link to each other through their sites to trick search-bots into ranking the members higher because they seem relevant.
Often these sites have thematic similarities or operate vaguely in the same industry but just as frequently, they’re completely unrelated.
If it’s an entire webring, then it’s normally managed by a single site that ensures compliance to certain rules by the members.
As Google’s algorithm become increasingly sophisticated link exchanges carry less and less weight in the rankings, in fact these days it can even hurt your site.
There are numerous reasons to completely stay away from link exchanges:
Google Doesn’t Really Care About Them
Google is pretty trigger happy when it comes to labelling a link exchange so even normal reciprocal linking that doesn’t seem natural will be ignored or penalised.
Even if it isn’t, Google doesn’t weigh ethical reciprocal linking heavily anyway, as it isn’t considered a reliable indication of a sites popularity.
It’s All About Content
As Google shifts the attention of its algorithm heavily towards content, linking as an SEO activity has shifted towards either links to relevant content or content linking to other content.
As content is really the life blood of the internet, this is just going to get more important. Being pre-emptive by become content conscious and steering away from pointless linking will protect your site from being penalised by Google Penguin updates (their new algorithm) in the future
Links Can Drive Traffic Out of Your Website
Whenever you include a link on your site, you run the risk of people leaving your site to follow it. Either because they’ve been distracted or the other site seems more appealing. This is all good and well in a world where the link at least helps with your rankings but in this one, you’re just throwing away potential conversions.
You Can’t Properly Trust The Sites You’re Linked To
In a link exchange you often have no control over how your link is displayed, what page it’s displayed on or even what the anchor and link text are.
The site you’re linking with may have multiple other links while you have almost none, accruing drastically less link juice. And, as you’re meant to regulate your own outbound links, being linked to a site with a poor reputation can affect your rank.
Unnatural Link Exchanges Only Harm Your Reputation
As users become more familiar with the internet they become more adept at recognising quality websites. Having arbitrary links that have nothing to do with your website or appear on your page in a unnatural way, are a dead give away to anyone visiting.
The only links that a webmaster should be interested in are one’s that provide further information on content on their site or recommend sites that would interest people that like their site. Everything else will just make your site look unprofessional.