Important, high-quality sites receive a higher PageRank, which Google remembers each time it conducts a search. Of course, important pages mean nothing to you if they don't match your query. So, Google combines PageRank with sophisticated text-matching techniques to find pages that are both important and relevant to your search. Google goes far beyond the number of times a term appears on a page and examines all aspects of the page's content (and the content of the pages linking to it) to determine if it's a good match for your query.

These are sites that link to other sites purely to increase the links to the site. Pay a few dollars and get thousands of links to your site. Too good to be true - you bet. Google hates link farms and sees these links as spam and will actively penalise sites that use such links. So, the first rule of linking is do not use link farms. The second rule is do not use lots of reciprocal links, Google can easily check this and the "Jagger" update that is currently rolling out seems to be particularly focused on penalising sites with lots of reciprocal links. The jury is still out on whether "themed" links will be treated in the same way. "Themed" links are links to sites that are very closely aligned to the same primary topic as your own site. If you think about this, it makes a lot of sense and is much more likely to be based on real content-based linking.