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However, some webmasters engage in link exchange schemes and build partner pages exclusively for the sake of cross-linking, disregarding the quality of the links, the sources, and the long-term impact it will have on their sites.
all it is saying is beware who you are linking too, some people link to everything and anyone, thus unrelated link exchanges for the sake of exchanging links will hurt you in the end. To me it doesnt sound like google is going to punish recip linking, just the people who link gadgets to widgets, two unrelated sites.
I guess in the end here will be 80 years from now, because I see many Smile sites link to Cry sites, but they are still living well. So Google is just a robot, he may not detect who is Smile and who is Cry.
I'm constantly crossing websites of market leaders in all kinds of sectors where same ownership sites form a complete network. Except that they are wisely using additional, both non-reciprocated and reciprocated in and outbound links to keep a natural look.
You know, some are very close to the fire.
Yet they use domain names, listed in rows, with variants for the same theme, trying to make it look legit.
Above example is of course nonsense, but the real domains aren't much better. The last network I uncovered just out of curiosity was in fact linked to famous institutions -- or their skilled and underpaid webmaster -- saving a little link power to a network of affiliate sites from the official homepage.
They can't identify REAL link shcemes, only blatant schemes... ie. link farms. And editorial reciprocal links aren't penalized, off topic, irrelevant, spammy links are.
... isn't that the same as it ever was?