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It is a established actuality that Google delegates each and every website page a Google Page rank, which is established on an complex arithmetical algorithm. Pages are ranked on a system with zero as the lowest and ten as the highest. Interlinking of websites - external (linking to other websites) as well as internal (links from on page of a website to another page on the same website) - is Appreciated when it comes to Page Rank. If website Y links to website Z, then website Y gets credited with a percentage of website Z's Page Rank. Website Z loses nothing as far as Page Rank is concerned - unless and until the link is to a bad website (porn, unnecessary voilence, gambling, etc.) or a banished area.

An illustration to comprehend the condition better: Site Z had a Page Rank of 5, there were only 2 outbound links to Site Z. One of the outbound Links was to brand new Site Y. Brand new Site Y had 4 outgoing links, with NO other Incoming Links, apart from the one from Site Z. Google allocated Site Y a Page Rank of 5.
From this instance in real life, it is clear that fewer outbound links on a per page basis infers a higher Page Rank.
If Site Z in the above model had a enormous number of outgoing links on the page, in that scenario, the percentage of Page Rank conceded would have been smaller and the New Site Y would have been allocated a lower rank than the equal rank that was passed with a smaller amount external links.
What To Avoid
While Engaging in reciprocal linking, ensure you monitor the quantity of outbound links that not only the page has but the overall site as well. Search engines such as Google do not like pornography sites, gambling sites and Link Farms that have thousands of links on them. Do not link to any of those types of sites unless that is your business.
You may well suffer big page rank loss and Search Engine results if you link to sites that are deemed bad neighborhoods or are prohibited. Be observant and ensure you observe before linking. Though occasionally you may possibly not be disciplined, you will not increase any benefits and the loss in PR (page rank) of your site is not at all worth it.
Be conscious of which sites the outbound links are linking your site to. Look at your outbound links methodically, to be certain that they are:
1) Still an functioning website 2) Still a resource for the goal you linked to them in the first place 3) They have not reconfigured formats or the theme and remain to be a quality site.
Page Rank progresses over time. Though not very often, Google does update the Page Rank, once in say every four to eight months. So link swap with like-themed sites or good sites is the greatest SEO Method.
Article Source: PageRank-Tools.com
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