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However if you offer the best product, benefits, service and package in the product class you have the major advantage. It will cause some trust and good PR for your site as it shows you are not scared of competition and are aware of it, so your product MUST be good.
You may also pick upi searches for competitors names. Just link with their names, not their keywords, to avoid giving them too much of a "leg up" in rankings. If the page you are linking to them on is not too high a page rank and you have more than a dozen links (inlcuding links back to your site home/section pages) the advantage to them is neglible as far as page rank goes.
I adopt a similar strategy to you for my own SEO site. I link to the "mother" of all SEO companies so that prospects can compare. The fact this may not do anything for your PR or positions is often outweighed by the business impact it has.
Like you I know the prospects that I am targetting will not pay the prices some of my competitors charge, so sending them to the competition actually encourages them to come back and buy from me!
some time ago googleguy (when talking about PR 0) said that it is not so importnat who links to you but to whom you link.Here we are talking opposite .
So if you link to pr 0 site (or lower pr or penalized)sites then this link COUNTS FOR YOUR SITE (negatively of course )and if you link to sites with high PR then this links doesnt count at all?
So linking to bad guys can get you some "punishment" and linking to good guys gets you nothing?(just a question,NOT a complaint :)
or is this only importnat when you link to them and they link to you. If there is one way linking only - then it is not importnat if you link to pr 10 or pr 0 site - ther will be no effect on your site. Correct or wrong?