The Internet is full of ads for link exchanges for building backlinks to your websites. If you exchange links with good quality sites with a high ranking it does help increase your sites page rank, but on the other hand if you link to spam sites it could hurt your ranking and possibly get your site banned by Google. It is best to avoid link farms like the plague; here are a few reasons why buying links from these sites are bad.
Link farms are penalized by Google
The recent Google Panda algorithm reset the quality ratings for many sites. Google bots crawl websites for information to discover if a site contains high-quality relevant content and ranks it by how much traffic the site receives. Link farms promise thousands of backlinks for one low price, however these links are from thousands of sites unrelated to your site’s content and therefor will not rank well and may even be penalized.
Linking to sites with no relevance
Linking to sites with unrelated content will not help raise your rating. The best way to build good quality backlinks is to find sites on similar topics and content and … request to exchange links with them. Some sites may refuse to exchange links unless your page rank is equal to theirs, if so there are other ways to get your link out there without spending a dime.
Linking to sites with low quality content or spam
Google ranks sites with low-quality content very low, which means if your site is associated with these sites (via your link) your site will receive a low ranking as well. Low-quality sites are sites that contain very little original content, contain a lot of affiliate ads or banners and use Private Rights Label (PLR) content without rewriting. These sites often get penalized for duplicate content because tons of people have bought the same PLR articles.
Banned from search engines
If your site does get penalized for associating with these sites you could find your site banned from Google searches or deleted altogether. If you use a Google hosted site or similar hosting site, you could wake up to find that your site and your content have disappeared. Google has very stiff penalties regarding sites it considers to be “spam”.
What you can do instead:
Use free methods of obtaining legal links from websites and blogs on similar topics. Exchange links with high ranking sites at levels four and above. There are a few sites out there that will allow you to join their site and include your link in your profile and signature for sharing through site communications.
Join a community forum based on your topic and place one link in your signature. Each time you post a thread or reply to another member your link goes in the comment. Just be respectful and only post a few times per day or the site moderator may think you are just there to drop links and ban you.
Write informative, good quality articles and submit them to high-ranking directories. Many of the popular article directories allow authors to place one or two links in the bio box section of the article which links back to your site.