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A link farm however would look different to natural linking. It would have 300 links in and 300 links out all cross linked.
Thus google should be able to tell a link farm by an algo.
Don't participate in link schemes designed to increase your site's ranking or PageRank. In particular, avoid links to web spammers or "bad neighborhoods" on the web as your own ranking may be affected adversely by those links.
Advice for someone about to use a link farm? Go play in traffic, kid. It's more fun.
There are some legit ones, even completely family oriented. One in particular like that seems to be working very well right now, since the links all show in backlinks. But I'm wondering how much it's helping for PR. One site I looked at, in spite of becoming involved in that group and accruing loads of inbound links from it that all show, has still dropped down in PR - not increased.
Risky at best I'd never use it on a site I wanted to make sure I'd be able to keep for the long haul.