Reciprocal links boost your PageRank and
allow search engines to group you.
Reciprocal links are also called
two-way links. When websites begin to link
naturally, there will be some cross linking in a given community.
When this happens, the links are called reciprocal
links. These links help Google and other search
engines to group you according to your business’s similarity to
others. This also allows your keyword advertising to be more
specific.
These should be used in moderation and only those links that
link to pages with a high PageRank should be used. For example, if
you run a boutique selling designer wedding dresses, you will
naturally link to your friends in the same industry in your area.
This will amount to a small number of links (say 5 or 10).
However, if your site has between 20-30 links, this will be viewed
as manipulated and there will be penalties placed on you by search
engines.
All reciprocal links must be
relevant to your website. If a link is not relevant, search
engines see this as spam or as a link farming technique. Be
careful of link exchanges, where websites can buy a good PageRank by
trading links or other link acquisition schemes, this is once again
a form of link farming and it is bad. Search engines have
penalised websites that have high reciprocal link
percentages because of this.