It really seems like a another lifetime, but there was a day when websites traded links, to be helpful to their visitors, and hoping in that exchange to gain a few visitors that might be interested in what their site had to offer.
I think back in those days a listing in a good directory could also result in targeted traffic to your website.
With the emrgance of Google, and their PR based algorithm things changed. Links became a means to manipulate SE rankings. It really made no difference if the links were of value to a sites visitors. The name of the game became get links, by link exchanges, purchase or whatever. Just get links. Links became the means for outranking your competitors. People in the SEO industry made the aqusisiton of links their primary focus.
Site optimization no longer focused on the visitor. You know the person with the credit card who might spend some money on your site, fill out a form, or whatever you hope the visitor does. Search Engine Optimization became focused on numbers, traffic and rankings.
Google created PR (or Link) mania. Though they have been trying to combat that for a couple of years people still hang on to getting links.
Every day in forums I see people asking questions about increasing their PR. In some cases they only want links from sites with only a certain TB PR. Personally if someone wants to link to one of my sites I don’t care what the TB PR is of that site. If you want to place any value on that green bar, a page that is 0 today could be a 10 in a year.
Recently Google has tried to clarify their position in this article titled Building link-based popularity. A lot of the article deals with paid links. the last paragraph states:
To sum up, even though improved algorithms have promoted a transition away from paid or exchanged links towards earned organic links, there still seems to be some confusion within the market about what the most effective link strategy is. So when taking advice from your SEO consultant, keep in mind that nowadays search engines reward sweat-of-the-brow work on content that bait natural links given by choice.
From Google’s Webmaster help page Center on Link Schemes.
However, some webmasters engage in link exchange schemes and build partner pages exclusively for the sake of cross-linking, disregarding the quality of the links, the sources, and the long-term impact it will have on their sites. This is in violation of Google’s webmaster guidelines and can negatively impact your site’s ranking in search results. Examples of link schemes can include:
I don’t think there is anything wrong with exchanging links if done for the right reason. That reason would be you are doing it to benefit your visitors. If your doing it in hopes of maniplating Google you may find it did not help, and in the worse case it could actually hurt your site.
I think this article is worth reading. Top 10 Reasons Link Exchanges aren’t Important.
In all the years I have been online I have never done a link exchange based on a spam email request for a link exchange.
I link out to other sites freely, and the majority will never link back to me. I think those links provide value to my visitors. I don’t care if the other sites links back or not.
The few sites I have exchanged links with were done like this. I started noticing traffic in my logs from a site. If that traffic persisted over several months I looked at the site. If I thought a link back would benefit my visitors, I linked to them. If I did not think a link to the site would benefit my visitors i don’t link back.