I am new to SEO so anyone can give me the idea & concept of 3 way link exchange & how it is useful in SEO process.
One Way links are alway best but 3 ways links also work well if you can't get one way links then go for 3 way
getting backlinks for a site using another site for linking to the other person is what 3 way.. it is a good one like one way but we should not get into link farms when doing 3 way
I paste this link to explain 3 ways when sending email to possible link partners http://www.kosmoscentral.com/seo-articles/how-2-create-one-ways.php
3 way linking is an extremely effective way of linking and getting more power from those links. First you will exchange links with a site to your main site. Then you will create a second site or blog and contact the site to exchange links. Instead of getting the site to link back to your blog you will ask them to link to your main site instead. This is 3 way linking.
What said above is important but remembet two important things NEVER NEVER NEVER link your two sites. That would create a passage inbetween the linking out site and the linking in site and would reduce the wheight of backlinks. Get always some links to your outlnk site (like directories) so that you don't have a PR0 or N/A PR, also remember that in this case you should link not to the home page but to the link page. Create multiple pages on your outlink site so that you don't have too many links on that site. THE MOST IMPORTANT THING about 3 way is to keep track. There is no software to know wheter the 3 way link you created is kept or not transformed in no follow after a while. Use a spreadsheet and write outbound link and inbound link.