This morning I participated in a forum discussion on a recurring subject: Should you exchange links with other businesses?
It’s a well known fact that a large number of inbound links to your site can improve your search engine ranking. Google views a high number of links as a "vote of confidence" in your site. What is less well known is that Google also looks at the relevance of the links to your site. e.g. If you are a construction company, it may be helpful for you to have inbound links from an architect and surveyor. But it won’t make much difference if the link is from an online jeweller.
My advice is that ultimately, it is quality rather than quantity that counts. Better to have a few high quality relevant links to your site than a large number of random businesses linking to you. So be wary of those spam emails that offer link exchanges.
