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Most have observed that links below PR4 do not get displayed, but they're still indexed and count towards your PR total.
A much bigger issue is the incredible danger you're flirting with by cross-linking all of your sites without having any other relevant inbound links.
Google has been known to hand out stiff penalties for these schemes which are designed to artificially inflate PageRank.
See Crosslinking, Interlinking and Reciprocal Linking [webmasterworld.com] for more details.
You'll want to read up on things by visiting the Reciprocal Linkage Forum and their Library for more info.
I'm not 100% sure I understand exactly what you're describing, but if you're saying that you've created a directory of links to all of the sites and posted this identical directory on every one of them, you may raise a few flags with the spam filters for 3 reasons...
1) This very closely resembles the way link farms work. While your use is quite legitimate, link farms are groups of web sites that all agree to host an identical page of links to all other sites in the group. There have been heavy penalties when this has been done on a large scale.
2) Duplicate content. If your directory is identical on each site that hosts it, you may trip the duplicate content filters.
3) If the network of sites doesn't have inbound links from sites outside of the network you may trip filters for having a "closed loop" of sites that are artificially inflating PageRank by cross linking.
1 and 3 can be remedied by simply being aggressive in your link building strategy so that the number of relevant links from outside your network is greater than the number of "incestuous" links within the network.
2 can be avoided by simply doing some customizing of the directory as it appears on each of the sites, or you could host the directory on a separate domain that is linked to by the other sites. This would create a "hub" from which all of the other sites radiate.
On a very small scale, the above may not be something you need to worry about, and if your site was hand checked by an editor it sounds like it would be fairly clear that the network is quite legit.
I just believe that being aware of the relevant issues is always of value, and allows us to make informed decisions.
the web sites are of different theme/content
Was this association created for the purpose of increasing search engine results... or is there a unifying principle beyond SE promotion. Is it just a referral network, or is there a common thread between the members and their site themes?
How long have the websites in the network been around and do they each have unique inbound links from sites outside the network? DMOZ? Yahoo?
Is the directory page the only place where all the sites are inter-linked or is there extensive cross-linking beyond the directory page?
The directory page is the only place were all the sites are interlinked. Each site though has one link from their homepages back to one web site. This lucky one web site is the winner of the association's 2002 Best Web site Award so, all the sites give it that recognition. This will change yearly.
No links to Yahoo yet except for the one site because this association just started and we have determined if we are going to ask the members to pay for Yahoo's fee yet in light of what has just happened. DMOZ will not let us in because they say we are affiliate sites since we use an industry products database.
What do you think?
How long have the websites in the network been around and do they each have unique inbound links from sites outside the network?
Many of the sites that have been penalized for extensive cross-linking were nailed because they were a "closed loop". Meaning they had no links from sites outside of their network.
Many believe that this is a determining factor in whether the spam filters go off.
There are plenty of site networks that cross link very heavily without penalization, but they also have tons of inbound links from other sites.
A lot of the networks that were penalized cross-linked much more heavily than what you're describing. Many had links on every page to the home pages of all the sites.
The other issue is the exact duplicate content and links posted across a network of domains.
Personally, I would have each of the sites link to a single members directory hosted on the association website. This would still serve the members and avoid any risk of penalization for either cross linking or duplicate content.
My personal opinion is far from definitive though... I welcome differing and supportive viewpoints from anyone else that has experience with these issues.
Your thoughts are greatly appreciated!
Question: If we take down the page from every site that shows the directory, which is a listing of all the member's sites and then do what you suggested <<each of the sites link to a single members directory hosted on the association website. This would still serve the members and avoid any risk of penalization for either cross linking or duplicate content. >> . How would this benefit all the members' sites?
Each web site will be better off seeking independent inbound links and not be associated with this cross linking association IMHO.
Five guys in high school say they are cool. They call each other cool. But not a soul in the rest of the school says they are cool. Should the five guys be considered cool by a search engine?
The five may not be "spamming cool", but their opinions shouldn't help their cool rank a bit. get outside links.