Momo

Can somebody explain to me what exactly cross-linking is, why it should be avoided, and what the penalty is for doing that?

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Ninjamaster

When you simply do link exchanges directly with another site, google potentially can see it as link farming and it could hurt your Google PR and your keyword rankings. Most webmasters continue to do it anyway, as no one is really certain what those insane Google scientists are up to anyway.

beginnerwebmaster

From what I understand, you will not be penalized if you add them slow and steady. If you add 500 cross links in a week, it looks suspicious, but steady organic growth of your links is natrual and something they won't mind, even with back links. The other trick I hear is not linking to the main page. So say, I go domain1.com links to domain2.com/articles/222.html, then domain2.com links to domain1.com/111.html, from another URL, it looks like a different linking pattern.

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