After Penguin 2.0 Most of IMers think that link building is dead etc etc.. But truth is link building is NOT DEAD! it just changed the way it works. This is what Matt Cutts Said, About Link building..
Eric Enge:There are people who think link building is illegal now. Is link building illegal?
Matt Cutts:No, link building is not illegal.
Eric Enge:Really?
Matt Cutts:It’s funny because there are some types of link building that are illegal, but it’s very clear-cut: hacking blogs, that sort of thing is illegal.
Overall View about Link building:
# Link Building Is Not Bad: Just don’t try to get the link first, have compelling content people want to link to instead.
# Press Releases Links: They still “probably not count” but your goal should not be the link but the exposure the press release gives you to editors who may read them and cover your story.
# Content Syndication: If your content is being syndicated on other sites, give Google signals to know you are the original source. Make sure you publish well before others, possibly use rel=canonical, link to main source of content, and maybe use authorship.
# Problem With Guest Posts: A large number of people are doing it the wrong way, guest posts have become more like article directories or article banks these days.
# Links: Links are still “the best way” to rank content.
So In bottom Line, Link building really works, ONLY IF YOU HAVE High Quality Website. Unfortunately the whole thing was not video Taped 
In fact links are so important that if they aren’t any that mention or lead to your web site, it’s probably that search engines like Google and Yahoo will never find it.
Most common types of links are:
- Reciprocal Link
Reciprocal links can be made between two web sites, in order to exchange links and increase visitor traffic. It is a good way to start but search engine devaluate these types of links more and more as they can’t be proved to be popular except from their creators.
2. One-way link building
It is basically a simple link of a web site or of a specific web page, which content is valuable, relevant to what users are looking for and useful.
The importance of the web site’s content originality is not unjustified, as there are many “spams” in search engine results from fake links that try to gain visitors and high ranking.
3. Traffic Generating Links
Traffic generating links can easily be made when you leave a comment in a blog, write in forums or create user profile. It is not the most effective way to increase SERPs but you can expose your web site in that way and you might get visitors.
4. Social networking
Building links through social networks has a great value, since they are of great importance to the search engines. Therefore it is one of the most effective ways to show off your company and its features, as more people are likely to see it and visit your web page.
When you are planning on making link buildings for your web site, you should dedicate a reasonable amount of time to make it right. You don’t have to over- link your website because that will have the opposite result of what you are aiming for. You can start from Web Directories, but don’t stay there, because search engines will eventually start to devaluate your web site.
You can use any type of link building mentioned above, but when you decide to add your link in a blog, make sure your website has relevant and strong content that visitors will want to read and will suggest it to others.
Next to the link building you should also consider providing your web site with additional SEO techniques that will support and promote your site as well. Always keep in mind that relevance is one of the most important factors in SERP.
If you find it difficult and tricky you can always refer to search engine optimizing companies that specialize in such methods and will assure you for the results.
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