Many people are still stuck in the bulk and automation line of thinking with link building. Largely because service providers are lazy. Largely because business models that are highly automated in nature are easier to extract value from if people are not thinking through what they are buying. In much the same way many SEOs will still sell you search engine submission stuff, for many years many SEOs will sell you bulk or automated link building programs. People new to the market may be cheap or too lazy to learn SEO, are heavily pitched bogus offers, and read a bunch of outdated information that reinforces old ideas which no longer have any value.
Why does the outdated information get so much exposure? Because search (especially Google) is biased toward older sites. And, with search replacing directories and link lists at the primary means of web navigation people do not link the same ways that they used to. Google not only wants to automate selling paid links on your site, but they also are even trying to automate recommending related links, thus trying to require publishers to do more to earn an editorial link.
But if something is automated, aggressively marketed, widely used, and was effective at manipulating the results you have to think that the search engines would quickly aim to stop it. If those same techniques are generally associated with other low quality sites is that a good network to actively place your site in? Odds are that search engines would be extra aggressive at deweighting the technique if it was effective and generally associated with junk content.
Sketchy SEO techniques have a limited shelf life, and not long after you hear them mentioned people start patching up the holes, so those technically savvy enough to find new algorithmic holes are typically going to keep quiet about them and extract as much value as they can before the holes are closed.
Matt Cutts hinted that having mostly low quality links may prevent your site from getting crawled deeply, and, more recently, he also mentioned that if a site added pages too quickly it may get flagged:
It looks like the primary issue with the Windows Live Writer blog was the large-scale migration from spaces.msn.com to spaces.live.com about a month ago. We saw so many urls suddenly showing up on spaces.live.com that it triggered a flag in our system which requires more trust in individual urls in order for them to rank (this is despite the crawl guys trying to increase our hostload thresholds and taking similar measures to make the migration go smoothly for Spaces). We cleared that flag, and things look much better now.
Admittedly, if you participate in some markets (like consumer finance or insurance) many automated junk content sites will place you in their network by scraping your site and linking to you, but if you can get a few quality links you can easily beat out people playing the bulk numbers game.
If you want your SEO to be effective longterm it is best to avoid easy and automated techniques, in favor of layered or complicated techniques that are going to be hard for most competitors to replicate.
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