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There's a lot of debate in the web world, particularly in the SEO & marketing departments of mid-size and larger organizations, about whether or not to link out to other websites from their own. People are scared for a number of reasons; they worry that linking out could:[/ltr]
Harm their reputation
Damage their search engine rankings
Cost them PageRank
Create exit portals where users will drop off
In my opinion, these concerns are largely unfounded. Linking is common practice on the web - expected and respected by users of all kinds - and therefore, extremely unlikely to harm your reputation. Even if you link to the occasional site or page that's been taken over by a domain squatter, aspiring pornographer or entranced Twilight fan, your visitors are likely to carry a great deal of forgiveness, especially if it's an old link.
In much the same fashion, search engines recognize that even the best websites sometimes carry a link to the nether regions of cyberspace (talk about bringing back your '90's lingo!). So long as you don't carelessly provide links to malware-installing, pop-under spouting, Shamwow hawking pages, you don't need to take especially more care than you would linking to possible 404s.
As for costing PageRank - yes, it's true. Technically, the original PR formula (described in great detail here by my grandfather, Si) dictates that any link equity spent on external pages is lost opportunity that could have been spent on internal pages. HOWEVER, I (and many other notable SEOs) have seen very compelling evidence to suggest that not only does linking out NOT harm a site's rankings, it appears to carry some positive correlations with ranking, trust, etc. on both a page and domain-wide level. I'll cover this more in my reasons to link out below.
The final argument - that users will leave the site - ignores ample evidence that sites & pages that link out actually benefit from those links. Think about the most popular, most used service on the web - a website we all turn to dozens if not hundreds of times each month - Google. They make it part of their corporate creed to get users off the site as quickly as possible, and have benefited from it tremendously. Likewise, a survey of major newspapers on the web found that those who link out tend to outperform those who don't on many performance metrics. If you want more examples, check out Digg, Reddit, Yelp, Twitter & Delicious- who all link off their own sites as part of their core business and still get visitors coming back again and again. I have yet to see any proof that linking out to good sites that users will appreciate and enjoy actually hurts long term revenue.
So, with all those arguments against shot down (or at least, slightly maimed), let's dive into the positives. These all refer to benefits you receive from raw linking without nofollow (though a few can be obtained even when you link with nofollow, though certainly not to the same extent).
#5 - Linking Out Sends Trackable Traffic
If I link to a great site for finding local classes & teachers or this one for automotive advice or this resource for all things TV and they get even a smattering of visits, it's very likely that the website tracking folks will notice the link, visit SEOmoz and investigate. Maybe they need SEO services or would be interested in some of our spiffy tools. Perhaps they'll enjoy this post and link to it in the future. What I'm getting at is that we (all of us, not just SEOmoz) have the potential to attract important, relevant, valuable eyeballs when we link.
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#4 - It Makes Your Site a More Valuable, Scalable Resource
No matter how great a website you build, you can never be all things to all people, nor contain all the relevant information & value a user might be seeking on your given topic. As such, it makes great sense to leverage the power of the web - the power of links - to create an easy, scalable path to making your site's experience better and more rewarding for those who visit. If you find great links via Techmeme or Hacker News or SearchEngineLand, you're going to mentally reward those brands with positive appreciation and memories. Use that same power on your own site and you, too, can become a reference resource in your niche.
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#3 - Search Engines Likely Reward the Behavior Algorithmically
Our Linkscape team has spent a lot of time looking into spam analysis and stumbled upon some pretty cool theories and applications. One in particular that stands out is the so-called reverse or "anti-trustrank" that looks at who you link to as a signal of quality vs. spamminess. While it certainly pays to consider the links you've earned, looking at the links you send can be an equally usable and useful signal of quality - low quality sites tend to link to a far greater share of junk, while great sites typically link to other great sites. These webs of trust & value can be algorithmically mined by engines to produce better search results. Take advantage by linking to resources your users (and the engines) will love. (BTW - just internally speaking, we really like using Linkscape's Domain-Level mozTrust metric for stuff like this.)
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#2 - Linking Out Incentivizes Links In
With a few notable exceptions (Wikipedia & YouTube, I'm looking in your direction), websites that earn links tend to do a good job of linking out themselves. When you link out, it creates a signal to other websites and content creators that you're a willing participant in the web's natural linking environment and not a closed-off community or purely self-referential, pompous know-it-all.
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#1 - Linking Out Encourages Positive Participation & Contribution
There are a lot of very smart, very dedicated, talented people on the web that can either contribute to making your efforts more successful or inhibit your growth. When you link out, especially in a consistent, opportunity-driven way, you build incentives for the Linkerati (bloggers, social media sophisticates, online journalists, website builders & forum participants) to engage with your site. Granted, when you're small and just starting out, the incentive is small, but I've seen, via first-hand experience, the value it brings. Don't underestimate the power of rewarding your community - it's built some of the most amazing brands on (and off) the web.
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I think there are plenty of other good reasons to link out as well, but these are certainly top of mind for me, and typically make a very compelling argument when we work with clients who are initially opposed to the idea. As always, I'd love to hear your thoughts, experiences and rationales for linking out (or not).
p.s. A big thank you to Tim Grice (aka seowizz) for his timely YOUmoz post on this topic. Read the post, How Effective are Outbound Links, and comments for more interesting discussion about the potential SEO-specific benefits of linking out.
