1. Is it against the rules to do link exchanges with other sites? 2. How does Google prove you BOUGHT one of the links? 3. Has anyone ever been banned for this? What was their story?
Google's algorithm is based around "natural links" - i.e. a link someone puts on their site because your site is so good or offers valuable content - not because of some deal you have with the site - or sites with the same ownership cross linking to each other to try and increase rankings. Link exchanges are not "natural links" - i.e. the site has given you a link because you are giving them one. These are not as good as a one-way link. Google claims they now have the ability to detect paid links. I'm sure they have some algorithm, but I'm sure it isn't perfect. Google isn't going to tell you how they do it, but it's likely based on the position of the links (like links in the footer of a page) or links not contained within the body of the text, total number of outgoing links on a page, etc. Links that are on sites that do match the theme or content of your site are also devalued. Google isn't going to ban the site being linked to because there is no way to be certain that the site owner wanted those links. Google will just ignore any links they want. Sites selling links have been known to lose their PR and be removed from their index in some cases. The yahoo directory and botw.org are two example of sites that charge for commerical listings and are not considered mere "paid links" by google as both those sites have a quality review process that does not accept all sites just because they pay. The other directory mentioned by Googles Matt Cutt's is DMOZ.org - which is free (and also rejects about 99% of submissions).
1. So they don't "ban" you per se (if you're an Adsense publisher with fishy link deals), they'll just chop down your page rank a bit? 2. And so directories like Yahoo and DMOZ improve page rank? I'm not looking to buy links, but I want to do link exchanges with other sites, and I don't want Google to think I'm selling links on my site or buying links. And for Google's computers to compute all this information (algorithm calculations, etc), they must have a crap-load of computers doing a HECK of a lot of processing. Incredible they can do that for millions of sites and billions of pages.
1. So they don't "ban" you per se (if you're an Adsense publisher with fishy link deals), they'll just chop down your page rank a bit? They don't reduce your page rank, at worst, they just wouldn't count the link. 2. And so directories like Yahoo and DMOZ improve page rank? Sure they can, but forget about page rank. Quality links from sites related to your sector is what google likes. A high PR that comes from completely non-related sites won't help you rank any better. I'm not looking to buy links, but I want to do link exchanges with other sites, and I don't want Google to think I'm selling links on my site or buying links. Link exchanges do not carry as much weight as one-way links. Try submitting to the free directories or write articles than can be published on others sites as long as the link back to you. Issue a press release. Do not create a link farm on you site (i.e. a page called "links.html" which is nothing but a ton of links to non-related sites. Quality can often be better than quantity. Forget about exchanging links with poor quality content, pharmaceutical or gambling sites. If you aren't selling links, then you don't need to worry about google thinking you are. If you could purchase a link and get your site banned, then others would be doing it to a competitor to get them banned.
Thanks for your response. But wow, Google acts totally insane when it comes to invalid clicks, banning people left and right, but they seem pretty lax when it comes to paid links and other things.
I'm not sure they can really detect paid links...perhaps you just like a site and are linking to it, but I'm sure there are places where paid links would be...in an area called "Affilates" or in the footer is normally a general rule. The best way to avoid any doubt...is if your site pertains to barney, don't be linking to viagra. That's just a dead giveaway.
What if you pay someone for a link thats within the content of the other site and is also relevant. It would be almost impossible to tell whether its a paid or a natural link.