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But after reading about SEO and how it works, I came to the conclusion that it is better to take these links off; I felt my site was leaking visitors to other sites through these links.
Now my site has virtually no links to other websites: is this a good or bad thing? will Google, Yahoo and other search engine penalize me for not linking to anyone?
Please note that hundreds of websites link to my site.
You may leak PageRank but your'e not going to leak visitors. That is, not more than you lose anyway through back and home button, toolbars, address bars, favourites etc. It is one of the tasks of a web browser to make navigation easy and prevent users from being stuck in a particular site. So there is hardly a way to trap visitors, but there are plenty of ways to annoy them, and trying to trap your visitors is one of those.