Link building is an essential part of SEO, but many businesses try to find the quick and easy approach, which can often cause more harm than good. Google believes that both content and link building should be focused on quality, relevancy and good usability. The practice of SEO unfortunately, as of late, is becoming associated with SPAM and auto-generated, garbage content that many business owners mistake for building visibility online. The easy answer and the quick fix are not part of the search engine optimization equation. The practice of SEO takes time and effort. For a quick result, PPC (Pay Per Click) advertising is a good search engine solution--as the results can be instantaneous.

We feel that SEO is both an art and a science. Ultimately, our approach is focused on business development and optimization, not just trying to rank high for a specific keyphrase. Our approach to SEO is a fairly holistic practice--one that considers page optimization, transactions and content improvements over time, as well as, building better search ranking.

For business owners or website owners just looking for an introduction to link building, the following information should give you some pointers and context. This quick intro assumes that the reader already understands some of the basics of search engines, Page Rank and search algorithms.

No Follow Links, rel="nofollow"
As we believe that content and links should be focused on the concept of quality, we should start with "no follow" links. The no follow attribute is a parameter that tells Google a link is an advertisement and to not pass Page Rank to the destination URL. This attribute is great for blogs and news websites, which might otherwise get penalized for linking to an assortment of not topically relevant websites and web pages. Obviously, ads in many cases need to link somewhere, but external linking can reflect in both a neutral/positive way or possibly a negative way. Some instances where a webmaster would wish to employ no follow links might include: 1. Paid links 2. controlling the prioritization of robots crawling your site content or 3. untrusted sources (content or websites) and 4. user generated content like comments or publicly posted event submissions.  (SOURCE: Google, http://www.google.com/support/webmasters/bin/answer.py?hl=en&answer=96569 )

Directories, are they worth it?
Well, it depends. You should avoid link farms entirely. Simply don't waste your time submitting your website to crappy, over saturated directories, but there are a lot of great directories out there that can be quite useful to users. Directories should be useful to a real, human user. For some businessses, being listed in a directory can actually help that business develop leads to customer and b to b relationships. This is valuable. But try to keep your advertising relevant to directories of the right niche or topic. You can also check the ROI of your directory or ad listing by creating a tracking URL by adding "?=trackmyad" to the end of your URL. Simply add the "?" followed by a custom message of your deciding and you can easily filter and measure the performance of that listing within your Analytics system. Some directories, however, may not be as helpful. Super spammy directories may be discounted from your incoming link values or simply get you a ton of SPAM submissions from your content form. Not super helpful for a business looking to build real customer relationships.

Not very helpful: Tons of low quality or low Page Rank links
Google has warned website owners that sites can be penalized or looked upon suspiciously if they generate tons of low quality links in a short amount of time. Some SEO companies actually offer this service / product, which may end up doing more harm than good. First of all, Google may not even count many of these links, so it could be a waste of effort. You can get a lot more value from a single quality, strong website than an army of links from poor quality websites. Again, an easy to understand rule for SEO is: make it useful for real people. If a penalty were to occur for a website based on incoming poor quality links, a new website would be at a greater risk than an established website with a history of quality content under their belt.

Relevancy is truly valuable
Google places a strong value on relevancy, but so do searchers. The whole point of a search engine is to find content that is relevant to the user. If your site is not relevant or helpful, the user will quickly bounce away. Studying bounce rates in your analytics tool is a great way to improve the overall performance of your website. By studying and trying to improve bounce rates for specific content pages, you can better understand what your visitors are looking for and how to better engage them. Sometimes, a visitor will bounce away not because of the content, but rather the presentation of that content. You can perform experiments and tests to gain better retention by improving the content structure of your site and improving the initial impression of a page through design and page layout. Make the page cleaner, easier to read and prettier!

Contribute to the community
One great way to build quality links and recommendations that mean something is to actually contribute to your specific  niche community of blogs, forums, social websites, websites and press. Forget link sharing. Try actually responding to articles in blogs and begin to development conversations with other bloggers. Interact with interesting pros in your field using Twitter, Facebook and LinkedIn, which will help you both promote your services/products indirectly and become known as a respected and valuable member of that topical community. People actually do link to content that is useful and helpful. Also, you can build a lot of quality traffic from social media by carrying conversations that are topic focused--rather than being a direct sell of your services.

Sources:

1. Google Webmaster Central
2. Search Engine Land
3. Bing Toolbox for webmasters & Blog