Links are the pathways created by website owners that lead from one website to another. Links are seen on virtually every page on the Internet to send the Internet surfer to another page -- either on the same site or to a different website entirely.
3 Different types of Links:
Outbound links: That sends a visitor to another website.
Inbound link: Brings Internet traffic from other outside websites.
Internal site links: That sends visitors to different pages within the site itself.
Outgoing links:
Outgoing links refers to links pointing to other related sites from your site. Search engine spiders will crawl your site's outgoing links and determine that the content of the sites you link to are related to the content of your own site.
How much importance outgoing links add to a site's link popularity rating is still being debated by search engine optimization specialists.
Incoming links
Incoming link popularity refers to links pointing to a site from other related sites. In addition, there are two types of incoming links:
1. Links from sites you control
Cross linking all of your web sites. Select keywords that describe the site you're linking to. The reason for doing this is because some of the major search engines, such as Google, place a great importance on the text used within, and close to, links.
2. Links from sites you don't control
There are two ways of finding sites to link to yours. The best way to get other sites to link to yours is to ask them politely. And the best way to find likely candidates is to ask web sites that link to your competition.
To find out which sites are linking to your particular competitor, visit a search engine such as Google and enter, "link:" followed by the competitors domain name (with and without "www").
For example:
link:google.com
link:www.yahoo.com
Internal links
Internal link popularity refers to the number of links to and from pages within a site. I recommend cross linking your important related pages. This helps search engine spiders find and index your most important pages quicker, especially if some pages are buried deep within your site.
From an SEO point of view the more inbounds links to your website, the better for your website. While quantity of links is important, quality is even more important. Some inbound links are simply given more value than others by the search engine algorithms. Links from pages deemed to be more relevant, in terms of topic and theme, are given more weight. Also given more value are links that are labeled with more keyword rich anchor text, links from pages with higher Google PageRank, and links that originate within content pages rather than from the ubiquitous “links pages.” There is even some evidence that linking out to other Web pages provides some benefit to the link sending page.
The types of sites you should concentrate on getting links from include major search engines (Google.com), popular search portals (MSN.com), web directories (Yahoo.com and Open Directory Project - dmoz.org), high trafficked sites (eBay.com and Amazon.com), news sites (CNN.com), and sites related to your site's theme.
Links that a website owner should avoid? Do not get links from link exchange sites and link farms.
While not all links are created equal, or provide comparable benefit, search engines evaluate a site by the company it keeps. Because no website owner has control over who links to her site, links from sites under penalty, or even banned sites, are not held against the receiving page. The search engines do, however, take a dim view of links sent out to sites deemed to be “bad neighborhoods.” A website owner can control who receives a site’s links, and linking to sites under penalty or ban can hurt the linking page’s search ranking dramatically.
Bad neighborhoods are specifically mentioned in Google’s published Webmaster Guidelines as a “linking scheme” designed to trick the search engines, and are therefore subject to penalties and possible banning. The most well known bad neighborhood is the so-called “link farm.” A link farm is a pseudo-directory that purports to send traffic, PageRank, and link popularity to its member sites. The usual requirement of linking to any and all member sites, whether theme relevant or not, announces that the links are not natural, but are purely for gaining higher search engine rankings. As a result, even linking to a bad neighborhood or a banned site can result in a penalty, or even an outright ban for the linking site.