Trading links with another site may not help you or the other site.
Google wants to know if your site’s content is trustworthy and valuable to their users. It uses the PageRank scoring system to describe your site’s popularity. One large factor of your site’s score is the quality and trustworthiness of the sites that link to yours. Such a link is called a “backlink” in search engine optimization (SEO) terms.
When a site with better popularity than yours links to you, it bumps up your ranking. Government (.gov) and educational (.edu) sites are more trusted by Google, and they are very valuable backlinks to have.
Beware of Toxic Backlinks
A site that is less popular can hurt you, if Google has taken disciplinary action against the site. A toxic site is one that has a history of spreading viruses, spamming people, or using ‘black hat’ SEO techniques to try to boost their popularity artificially on Google. Such a backlink could lower your PageRank.
For this reason, Quoin Design advises its clients to avoid signing up for “link farms” where people trade links in the hope that more links will equal better page rank. It just doesn’t. Your time is better spent writing rich content which is what Google wants more than anything else.
Before you trade links, make sure that the other site’s PageRank is higher than yours. If it isn’t, you might still want to do the deal for other business reasons, but make sure they’re a good internet citizen first. It’s the quality of the backlinks that counts, not the quantity.