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Hi Nina,
In the 'good old days' the search engines just looked for the number of incoming links - the more, the better. Reciprocol linking was a great idea.
Today you have to be more careful - a relevant reciprocol link can still be beneficial as it's likely to be seen as a 'resource'. The search engines look at how links benefit the vistors etc so if you link mentions keywords like 'pet sitting' and then links out to a website offering 'pet health care advice' it's likely to be benficial because the article might mention pet sitting etc so you'll have some common keywords.
Generally search engines don't penalise for reciprocol links - the most they'll do is 'ignore' it in their page rank algorithms. A few reciprocol links shoudn't harm your site at all - just make sure they're relevant.
The ultimate aim though is to achieve relevant non-reciprocol links...
Hope that helps....
Danielle
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