Ditto. Have lost exactly 50 backlinks for the past two updates ... about 25 in each update. However, rankings have improved slightly. Am now #2 for my most competitive keywords. Was #4 two months ago, then #3 last month. (No new incoming links were added in the past two months and I've changed nothing on the site except a few prices.
I checked the backlinks for the two sites I displaced and they have lost a considerable number of incoming links. Many more than I. (I just happened to have a copy of their links from two months ago). To me, it seems that relevance of incoming links is finally playing a big part in the PR algo which is also affecting the SERPS in a positive way. (Thank you Google!)
The strange thing is that 99.99% of my removed links were relevant to the site. However, they have been there for quite some time, so it could be an aging factor. I'm not entirely convinced about this "link rot" theory because it seems to me that relevance and not age should be the most important criteria in order to produce the best algo.
I have to check which cats the removed links were in to see if my theory holds any water, but I believe Google is working on some sort of "tiered relevance" algo based on categories.
Let's say I legitimately link my Florida yacht charters site to your Florida hotel site because my charter guests frequently like to stay in hotels for a few nights before and after their charter, the link may not count due to a large disparity between categories for which the bot cannot understand the relevance.
For instance, a link from a site in the following category:
Regional > Florida > Guides and Directories would certainly be counted if linked to your hotel site ...
But, a link from:
Recreation > Boating > Charters > Florida > Fleet Agents may not count because the categories are not associated closely enough ... at least as far as the parameters for the algo are concerned.
Don't know ... its just a theory, but one I am going to try to prove or disprove.
What I am saying is that I don't believe in the link rot theory 100%. I think Google is trying to come up with a link relevancy algorythm which will blow the doors off just about everyone else out there.
Though, while they are tinkering, some very relevant links with legitimate reasons for being on your site may not be credited in your link count. I imagine coming up with an algorythm for link relevance would be a mind boggling undertaking ... but I have no doubt it can be done.
I hope I made this clear enough to follow ... Thoughts?