goodroi - 1:59 pm on Dec 17, 2011 (gmt 0)
When you think about the basic concept of reciprocal linking it would seem to cancel itself out. Simply explained if you give me a dollar and I give you a dollar, we still have the same money at the end of the day. Personally I still use reciprocal linking but IMHO it is more for marketing and less about ranking.
One way you can still gain some value in reciprocal linking is by exchanging relevant links with high traffic sites. This can boost direct traffic to sites. A local doctor's website could exchange reciprocal links with the local dentist. This is helpful to users and helps both sites better promote themselves.
Also if a webmaster manages to negotiate reciprocal links with stronger websites they can come out ahead. For example imagine negotiating a reciprocal link on the Google homepage.
Webmasters can also be sneaky and recruit reciprocal links that are then cloaked from Google. This would sorta turn them into one way links but I would not suggest it as there are multiple issues involved.
The trouble with reciprocal linking is that some webmasters think that reciprocal linking by itself is strong enough to convince Google that they are an authority website. That is not the case. Authority websites typically have many one way links to them. Webmasters need to think about how much time & resources you can commit to link development and then figure out which links will return the best ROI. Also it is better to have at least some reciprocal links than having zero links.
ps Don't forget that the Google keeps becoming more complicated and that backlinks are not the only item in the ranking algorithm.