This is also known as reciprocal link exchange. It consists of having webmasters exchange links to and from their respective websites. Does this still work? Some webmasters claim it does and some others say otherwise. This debate is as old as the internet and has been going on for over a decade, with the recent change in Google algorithms it is even harder to gauge and quantify the effectiveness of link exchanges.
If the website exchanging links with you has a good Google page rank, seniority, reputation and credibility it can sometimes help. But you must be able to know what site is a good link exchange partner and what sites aren’t. For this tools are needed like the Alexa toolbar to measure traffic rank and the Google toolbar to measure page rank.
The higher the figures where the reciprocal link to your website is the more beneficial it will be. It all depends on the industry compatibility of the link exchange site partners and even specific link exchange URL (web page). For a link exchange to be effective, it has to be done with very specific parameters. The page rank (Google algorithm that determines the “value” of inbound links of his links page to yours and vice versa can make a huge difference, if the other webmaster is unaware of these specifics, it could be advantageous for you to exchange links with this site(page) if his page rank is in your favor (superior to the reciprocating link to him from your site). It is important to fully understand the benefits of SEO for link exchange to have a good strategy.
More traffic to your site: Building links to your site in other domains results in more traffic to your website. When you place links on other websites with a similar theme, then more people will get to know your website and browse it out of interest. The more links you exchange with different sites, the more traffic you will receive to your site. For example, you have an article about bed bug bites and treatment and want to link with a site selling creams.
Better ranking in search engines: Some search engines, such as MSN and Askewest, require registration to promote them. However, these engines can pick up your links from another website. The more links you have pointing towards your site, the better ranking your site will enjoy in the search engine.
On a final note, building links is an effective way to promote your websites to new users. It is like advertising your sites to your audience, enabling them to be aware of your sites and browse them more regularly.