Which method of linking is better?

[mwack]

Okay, let's say you're going to do a link exchange with 50 sites. Your site is about widgets. Now, these other 50 sites aren't necessarily on-topic - they'll use whatever anchor text you want for the link, and even provide a brief description, but they're on different subjects such as sawdust makers. However, any link is better than no link.

Now, as far as PR and SERPs, what would be better:

1) Do a link exchange as normal - setup a links page, yadda yadda...
2) Make a new on-topic website about red widgets, give it unique content, and exchange links with those same 50 sites.. Then, on every page, have one outbound link to your widget page with good anchor text.

This would give you a single one-way link from an on-topic website that has 50 incoming links. Would that be worth more than just doing direct link exchanges? Less? Or no difference whatsoever?

[Import Export]

mwack. I think your time is better spent harvesting more genuine links that will provide you with more quality results. From what you described, it sounds like the sites your exchanging links with are the neighborhoods most like to avoid. Granted, if incoming links from 'bad' sites could harm your ranking, then you could easily bring down your competitors. However, there are obviously other factors at play in regards to having a large percentage of your links coming from such neighborhoods... Now, you mentioned linking back to them from your website. That is exposing the intentions of the website to the se's. Now a penalty is 10x more likely and justified. I would think about how you want to structure your linking campaigns, and work towards a version of your #2 choice.

I think if you skim through a couple pages of threads here in this forum you'll find answers to most all of your questions.