Brett Tabke closed down his Buddy Links program many years ago, stating the following:
You must ask yourself why sites would join BL in the first place? Because they couldn’t get listed in the search engines. That left us at times ‘bottom’ feeding.
Broad Based Reciprocal Links Don't Work:
In spite of Matt Cutts mentioning how reciprocal links were hurting people some of my friends were still making the mistake of being too reliant on link trades, creating obvious links pages. One of my friends hired someone who did nothing but link swaps, and, in the process, prevented my friend from ranking for anything in Google other than one 7 word phrase.
Why Some People Still Think They Do:
I recently posted about how some sites engaged in broad based reciprocal linking are killing themselves in Google. The comments on that post were entertaining. After listening to some guy who goes by the name DomainDrivers comment on and on about reciprocal linking being an effective promotional technique I came to realize the disconnect which prevented him from believing the truth
It is difficult to get a man to understand something when his salary depends upon his not understanding it. - Upton Sinclair
And then some people look at a portion of the market and want to believe that what is easy for them to replicate is the answer to their problems. Kirby made an excellent blog comment about why many people read the market wrong:
The debate on reciprocal links wont end for a few reasons.
First, the rules are not evenly applied. Older sites that have built up a degree of trust with aged links will get a way with more.
Secondly, it varies from industry to industry. With real estate, there exists a perception that since the space has lots of competitors, it is therefore competitive. Not true.
Do reciprocal links work in this space? Absolutely. The reason, however, is not because of the value of these links, but because its the primary tool of the majority of sites in this space. It tends to boil down to winning a race of mediocrity. Will they win in a truly competitive space? No.
Take a site and get a handful of good quality links with only a small percentage of reciprocal links and it will beat sites like domain drivers' clients hands down.
A Life of Finite Resources:
And the problem with reciprocation is not one associated with the web. The web is just a reflection of the real world, and the problems associated with reciprocation are that each of us have finite resources, finite attention, and a finite lifespan.
Your PageRank, your authority, your reach, ... they are all finite. Chop it up and trade it again, but eventually you are just going to create weird footprints.
Do Reciprocal Links Build Brands?
On that same thread a person who signed their name as being associated with Links Manager stated the following:
Reciprocal linking should be conducted as a BRANDING function.. never as an SEO function.
But you don't build a brand by trading links. You build a brand by promoting things you like and having people who like you promote you. It is much easier to do this if you allow others to fill in your holes where they are passionate.
How to Reciprocate:
Hugh recently mentioned a killer quote
I don't bother "networking" anymore, instead, I try to build relationships with people I find interesting, and who I think are doing interesting things. And I make it my mission to help them in any way I can to achieve their mission. I find this much more satisfying, much more honorable, and much more fun. And this is the cool thing about people....When you help them out in this way, they help you out. Not because it's a tit for tat deal, but because both parties are engaged in a mutually beneficial relationship that extends beyond the next favor.
Examples of Ways People Have Helped Me:
One person reformatted my ebook just because they liked it. Another friend recommended an editor that is currently editing it to make the grammar better. Another friend wrote my sales letter. Another friend helped me launch an ad network. Another friend offered to do multivariant testing. Another friend designed my site. Another friend gave me public speaking tips. Another friend became a business partner and sat next to me while I was giving a speech to department heads at a fortune 500 company. My most popular SEO tool (SEO for Firefox) was created by a friend who I knew before I got into the web.
Passion as a Proxy for Value:
If you are hanging around bottom hangers (reciprocal link trading hubs, for example) you are valuing your time at next to nothing and are surrounding yourself with bad ideas. Everything you see or do effects how you perceive the world and how you act. And how you act also determines what and who you attract into your life. If you are passionate then passionate people will enter your life.
You are only as good as the people you surround yourself with. You build a brand by creating friendships with honest people who are doing well, and try to help them do better. I talk to some friends like Andy Hagans, Caveman, and Werty all the time, and they always give me good ideas to help me improve my site and marketing.
When you are passionate about what you do you create value beyond your income. You accumulate friendships, assets, brand value, and market influence which are worth far more than most people realize.
I still trade links sometimes, or just link to friends knowing that they may link back, but most of my link swaps are only representative of friendships, and, to me, that seems the only way to make it worthwhile.