You know that linking to another site is like casting a vote to that site, giving it credit. The more credit and votes a site has the better for its rankings. Now when linking to another website you\'re giving some of your website power and credibility and so to speak you give away pagerank. You don\'t want to link to external sites if there isn\'t a real reason behind it. The more external links you have the more power you\'re giving away. The only time it\'s good to link to external websites is when doing link exchanges. A website links to yours and you link to them. That\'s fair, because you give and get credit. The other way is by using nofollow tag on the external links. But some still do not use it the right way. Using nofollow tag on an external links will appear normal to visitors but for search engines it\'s like there\'s no link at all. Do not use it on your link exchange partners. You risk link partners finding out and remove your link from their website. It\'s going to get easier very soon that those who use nofollow tags on link exchange partners to get easily caught. Do not use it if you steal or grab for a better word articles from article directories. You risk penalty of duplicate content. Give credit to author or if you don\'t want to link to external website when you should, then write your own content. That\'s better obviously than using some other people\'s article. If you start a blogger blog, first thing you notice is a link to blogger itself. If it\'s not against blogger TOS that you should read, remove that external link. So backlinks from other sites is like they\'re giving you votes and credit that\'s why your rankings increase. Linking to external websites if you overdo it your rankings may get a decrease. That\'s also why you want to make sure after say two month of doing link exchanges that your link partners are linking back. Then remove the ones that are not. That way you do not have too many external links. One other punishment of external links is when you link to a so called bad neighborhood. But too many webmasters worry too much about this. First of all if you are using articles and linking to external websites, grab articles from a trusted article directory. A note about link exchange partners, is that if their website looks good and clean and they are indexed, you don\'t have to worry they\'re bad neighborhood at all. If you use a software like OutRankSmart, it will find only clean websites for link exchanges, making your life easier.
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