Tamashi

A = One link, no reciprocal.
A-B = Your site A links to someone else site B and vice versa
A-B-C = Your Site A links to someone's site B, and his second site (C) links to your site A so everyone has a one-way backlink.
A-B-C-D = A and B are yours C and D someone else's. You Link from your site B to someone else's site C, that person links from his second site D to your site A.

What tinafaye said about link values is onyl half the truth. Search engines want people to naturally link to other websites without any deals or trades. The reason why A-B-C and A-B-C-D are better is because search engine spiders will not find a link back to you on the page when following your link. so A-B-C and A-B-C-D is a strategy to trick the search engines, and make them believe the link was made naturally without any kind of "deal" or "trade".

However, the people at Google are probably smarter than all of us together here, and I'm sure even this type of linking can get detected by search engines (as Matt Cutts suggested already in one of his previous Q&A's). So no way of linking is 100% waterproof. But if you want to link with someone, do it A-B-C or A-B-C-D for the best possible results.

A-B also counts, but it will have less weight.

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