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However, my site has over 250 links that funnel directly to my join page. If was to foward all of my traffic to him, I would have to replace all 250 links that lead to my join page to his.
He has agreed to put a link from his site to mine on his homepage (his site is PR5).
1. Does Google count all links from a site or just one?
2. Will this hurt my rankings?
3. How can I go about this in a profitable way?
If he wants your traffic (and you seem ready to give it to him?) then why don't you simply sell your site to him?
The answer is yes, all those links out will hurt your site's PR and your Google rankings to some degree. You can avoid this by using a redirect script that Google can't spider (e.g. exclude it via the robots.txt), but your competitor likely wants a PR boost and may object to that.
Scenario:
You and maybe a couple of other competitors give thousands of links to this competitor and sooner or later he will ourank you in SE results.
Now what? You have a lower ranking, meaning less visitors, meaning less visitors you send to your competitor, meaning less "lead payments" etc..
Additionaly, by sending all your visitors to him, you loose your identity to existing and future visitors (clients?).
You are turning your website into a doorway page to your competitor.
By allowing your competitor to "hijack" your visitors (clients?) you are putting yourself out of business.
Well, I guess you can see that I really don't like the concept of affilates and again:
If your competitor wants your business, let him pay for it!
You have a PR of 6 and 16.000 visitors a month? Wild guess: 1-2 years of developing your site? And you give it away to become an affiliate of some smart a..?
If I use their technology, I feel I can convert a lot more.
So you think if I include their link in a robot.txt file so Google can't follow it, I'll be fine?