Search engine watch has an interesting post about reciprocal links called “are reciprocal links dead?”.   The answer, it seems, is a resounding no, but beware…  For instance, check out this excellent post by Ian Mcanerin (here is his website in case you are interested:  www.mcanerin.com): 

I’ve had a client that had put up reciprocal links pages and used automated scripts to add and check them. They did this because their rankings were not very high and they hoped it would improve by doing this. It did - for a short while, and not very much. Then important internal pages started not showing up for searches they used to. When I took over, I did the following:

1. Went through the list of recips for people who had stopped linking to my client.
This is very common - agree to a recip, then a few months later, remove your link (or no-follow or javascript it), giving you a one-way from your victim. Like most tactics used by spammers and assorted nasties, it’s a numbers game, some people check back, others forget about it or trust them. You can usually assume that a site doing this either is or will be in a bad neighbourhood, and you do not wish to be linking to them for any reason. Not to mention I’m constitutionally unwilling to allow cheaters to take advantage of me or my clients on principle.

2. Went through the remainder and removed off-topic and unwanted links.
I’m generally fairly easy about what’s on-topic or not, but this removed about 600(!) links.

3. Ran a PR checker on the remainder
I kept most of the high PR ones and manually checked the low or no PR ones. I kept several of these because they were either good sites that were on their way to having higher PR or they were just plain useful or very much on-topic (measuring by PR doesn’t take into consideration that MSN, Ask and Yahoo don’t use it - never decide only on PR for anything). I also removed one very high PR site that has obviously been buying it’s way there and wasn’t going to last long.

4. Then I removed the automatic software and put the links in a proper, organized format.

This process lowered the number of reciprocal links from more than 1200 to less than 50. The results were:

1. Absolutely no loss of displayed PR
2. An increase in rankings for almost every page of the site, including the ones that had been losing their rankings earlier.
3. A lot less stress and worry…

Reciprocal links can help you - but you need to choose the right ones. Be picky. If you find yourself trying to hide some links because your are embarrassed, then why the heck are they on your site in the first place? Reciprocal links can also hurt you. I have a lot of evidence to show this, as well. So whoever advised you [Ian was responding to an earlier question in the forum] was right about the possibility of harm, but wrong in their understanding of what is actually going on. Links don’t hurt you - connections to bad sites do (this is not always a link, reciprocal or otherwise). Likewise, connections to good sites can help (though if you think that linking to a few good sites will somehow fix a bad site, you are wrong).

As a follow up, Ian notes:

There is a reason why I removed the automatic software last - this particular system automatically checked to see if you were reciprocating and if you removed a link through the system, the other link was automatically removed. If you removed it manually, it did not….When I said I removed the links, I actually meant I stopped the reciprocal relationships.

In other words, the improvements in this sites rankings are most likely not do to the fact that Ian dramatically increased the number of 1 way, in-coming links by suddenly and secretly no longer linking to this sites linking partners.

So, it looks like reciprocal linking is a bit of a mine-field.  If you know how to navigate it then it can help get you where you want to get going, but if you don’t, then look out… In other words, reciprocal links aren’t dead, but they can be deadly, if you don’t know what you are doing.

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