I always believed exchanging links could hurt your search engine rankings - especially in Google. I know Google is all for “natural” link building and exchanging links with related websites definitely is not natural. I did, however, read that link exchanges that come naturally could help you. For example, if you decide to blog about another website and they link back to you 6 months down the road then this would be consider helpful. What is your take on link exchanges?
I think it is harmful when the link exchange become large scale. Anyway, link exchange is useful when the scale is not so large and their niche are similar.
I seem to recall Cutts saying that recip linking was ok in ‘moderation’. also, if it happens, quite naturally if you ask me, between sites which are in the same geographical area or which have a similar or related niche, I can hardly see what google would find wrong with that. what the engines are concerned about is recip linking in vast amounts trying to ‘game’ the system.
exchanging links in your town or niche, for example, all of which can help enhance you visitors’ experience (i mean who does have everything that anyone or everyone needs on their site anyway?) is good, especially if you are ‘linking up’ to a higher valued or more trusted site.
exchanging links with related sites is perfectly natural, in fact, that’s how the whole darn internet works, people going from link to link/site to site etc etc. it’s exchanging links excessively or with spammy websites that needs to be avoided.
exchanging links are not harmful but you have to check for quality link exchange sites. The sites should be relevant.
Link exchange is not harmful for the search engine ranking,if it’s few and link comes from qualitative sites…
Theoretical question - what would happen if every site tried that approach? It can’t work - you can’t have every site having more inbound links than outbound. So either you create a load of sink sites that exist purely to give outbound links - in which case they will have zero link juice and be completely worthless - or you accept that it is just as important to form part of the web and give your fair share of links as well as taking them from other people.
Yes ,I think one way linking is best.Because we have to make more inbound links than outbound links
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I know one site in my niche with many major keywords that’s in the top 3. I researched the website and the links I found pointing to it are predominantly swapped links, but everyone is relevant.
I’m considering link exchanges with only similar sites, then we will be equal in that regards, but I will be far superior to them in other areas, except domain age.
I’ve just found the following quote from JohnMu, a Google Webmaster Trends Analyst:
A good rule of thumb is to ask yourself “would I be doing this (linking there) if search engines didn’t exist?”
Another way of looking at it is to think about where and how you will be linking: Do you feel fine with linking to that site with a highlighted link in your main content or would you rather have the link in 5pt gray on white in the footer? Do you want your visitors to see and use it or is it just for the search engines?
Taken from http://www.seroundtable.com/archives/017068.html, if anyone’s interested
Whenever you try to manipulate the SERP, there is a problem with your site in the eyes of Google. It is not at all unethical to have link on your site with contents similar to yours and vice versa. In fact, Google endorses that it is a welcome thing to do that if done naturally - meaning you have not sold links to the other person and there are only relevant links present in that section and sometimes, the whole page.
There are many sites on the internet that exist for only one reason and that is to show webmasters how they can improve their search engine rankings by using SEO (Search Engine Optimization) techniques.I am often surprised at how many people follow the advice of SEO sites on how they can improve their site’s ranking in Google without even considering what Google has to say on this topic. Nevertheless, Google is very clear on the importance of incoming links.Reciprocal linking is an effective, free way to get more visitors to your website by google .A link from site A to site B is like a vote for site B. The more votes that site B gets, the higher it is regarded by search engines.
Just like everything else, reciprocal links seem to be OK in moderation. If you’re swapping links with every site out there, you could definitely see some issues. After all, you don’t want to get caught up in link farming or any other “guilt by association” scenario.
If you’re trading links with an authority site (one that has a PR equal or higher than yours), it can be ok. Just remember, the goal is to have way more inbound links than outbound links. Keep creating the quality content that will earn you one-way links.
Reciprocal links are of dubious value: they are easy for an algorithm to catch and to discount. Having your own version of the Yahoo directory on your site isn’t helping your users, nor is it helping your SEO.
From http://guides.seomoz.org/chapter-9-myths-and-misconceptions-about-search-engines
I agree with this one because I myself link build using the organic one way linking… 
I think it’s down to how you define “link exchange”. I’ve always seen it as synonymous with “link farm” … and therefore a bad thing. But on another thread recently, someone described it more as you have done, a “reciprocal link” … and I don’t believe that that would be considered bad, as long as you are sensible about it!
If you find a few other sites that are related to yours, and you provide links to them and they provide links back to you … that’s how the web works! That is what makes it a web. That is a very large part of what makes up the “natural” and “organic” linkage that Google likes.
But if you get carried away and find that you’re up to a couple of thousand reciprocal links … then it’s starting to look more like a link farm, and Google might not be so impressed.