Link Building: Are reciprocal links good or bad for SEO?

What is a reciprocal link?
Reciprocal links are nothing more than links between two websites that have been created and linked to each other for many possible reasons.
If the contents of the site are related, reciprocal links are a way to give visitors a chance to see both sites. What is the ultimate goal of search engines?
Before we go any further, let’s review the ultimate goal of any search engine and how it handles the result of a search:

• Based on the keywords you enter in your search, search engines try to provide you with the relevant pages that might best match up with what you intend to find on the Web.
• The pages that will appear in the organic result are ranked and ordered by the search engine based on a very complex algorithm. Each search engine has its own algorithm.

Do Inbound Links Provide SEO Value?
Many factors contribute to the way search engines algorithm rank websites. It has been known that inbound links, especially from high-ranking websites, are one of the various components search engines algorithms use to rank websites; the more popular a site is, the more the links from them matter.
Google doesn’t particularly like when webmasters promote each other’s websites using “reciprocal links” with the end goal to boost their website rankings. In the past, reciprocal links were a well-accepted practice and the backbone of the inbound linking strategies; this has changed since Google has altered its algorithm to identify the exchange of links by two parties. According to some sources, Google is now offsetting reciprocal links, if the contents of the websites are not related, especially if the intent is only for boosting the site’s rankings. You can even get penalized if the use of links on your websites violates Google’s Webmaster Guidelines.

Should I still use reciprocal links on my inbound linking strategy?
The short answer is yes! But you need to be careful about how to use this tactic. Here are a few guidelines on how to use reciprocal links:

• Use reciprocal links only when it’s natural and the contents of websites are related and relevant. Using “anchor text” (clickable text in a hyperlink) in the body of the copy of your blog is a good practice.
• Do not build your inbound link campaign based on this tactic alone.
• Consider the authority of the other website. It is best to reciprocate links with websites that have a better ranking than yours.
• For obvious reasons, It’s usually not a good idea to reciprocate links with a competitor.