I personally don’t approve of linking software that does the work for you. Why? Because the software does not do a good enough job where it can tell if the site it has the same theme or relative content that matches your site. Many errors slip through the process when this is done,Guest Posting that can cause damage to the reputation and rankings in the search engine. Also each site that you would like to link to you should have a decent PR ranking from Google to help your site’s rankings. (PR ranking is a method that Google uses to put a value on the web site) If you have too many web sites pointing to you with a poor PR ranking it could actually make your site drop in the rankings. And in addition sites with excellent PR rankings would help your rankings a great deal.
Linking farms and automated link exchanges
Linking farms and automated hidden wiki link exchanges are not recommended for the same reasons as the linking software. Poor quality links and potentially harmful to your site. In addition these two methods carry another danger. If the site that links to has been put onto a black list for spam, and your site points to that site your web site will automatically get black listed and your rankings will go down as well. That is why I prefer one way links to your site instead of reciprocal links. It may sound hard to do, but it isn’t and I will show you a way to do it below.
The more sites pointing to your site the better. Right?
Wrong! In the past search engines would rank you higher in the search engines by judging the value of your site to the number of links pointing to it. But because people have abused and try to cheat this system, the rules have changed. Now they actually penalize you for too many sites pointing to yours if they are deemed suspicious. For instance many other sites pointing to you with the same IP address (caused by you putting up mirror sites to build links), links that point to that do not have the same content as you (“once I saw a web design site having a reciprocal link with a lingerie site”), and links that have low PR rankings pointing to your site (in this case the more the merrier does not work).
“I’ve seen a site with only 10 links pointing to it (links from government sites) do better with searches than a site that had over 10,000 links pointing to it.”
Another thing to consider: Google has just bought rights to register domain names. So, here is a theory of mine that may show up later. Google may update their algorithm to check links to see if the domain name those links are registered under contain the same registration information. This way it could penalize sites that register a bunch of domain names to point to their site and try to cheat the system.