One of the main things that all search engines rely on is how many internal and external links a website has. In fact, Google determines the authority and ranking of a website almost solely on links. Specifically, they look at how many links there are, and of what quality these are.
Internal links have to have a relevant keyword included in them. The text of the internal link is really important for the Google spiders, who will determine how relevant a site is for each keyword that they monitor. Basically, the keyword that is written inside the link should take someone to a URL that has something to do with that keyword.
For example, if the link has a keyword phrase that is “oak table”, then the URL it refers to should also have “oak table” in it. If, instead, it links to a contact form, for instance, then the strength of your keyword will instantly drain, meaning it is reduced. See this as an electrical circuit: if there is no end to end consistency in the continuity of your circuit, then the power will either be drained, or it will be lost.
The number of links on your site is also very important. Try to not put more than 100 on a single page, however, as Google will start to think that you are a link farm, or they will believe that you are engaging in ‘link exchange’, which is a black hat tactic. In fact, you may be heavily penalized by Google for this, meaning that you lose a lot of your rankings. In the worst case scenario, you may even be barred from being found altogether.
Link building is a vital part of SEO, as you can see. Google will also look at your inbound and outbound links, focusing on the website that it is coming from or going to. Essentially, they will look at that third party’s website to see how high their ranking is. The higher they rank, the better it will look at you, although relevance is once again very important.
What Google has done to keep things “simple”, is create website classes or categories. Basically, these categories are used by Google to determine what someone’s character is. They look at websites as if they were neighborhoods in a big city. Your neighbors are your inbound link, and they have a certain status (like a pillar of the community). The more good neighbors you have, the better Google will see your site. Essentially, if you can show you are part of a good neighborhood, you will be seen as better yourself instantly.
If, however, your inbound links come from websites that are classed as bad neighbors (like shady characters that live everywhere in real life), this will look bad on you because, by linking to and from them, you are associating yourself with them, and therefore their bad practices. This can mean your website will fare very poorly overall.