Methods of website linking
Link building is one of the most important factors in top search engine ranking. Search Engines give importance to the web site which have incoming or backward links from quality and theme based related web sites. Search engines consider these incoming links as VOTE for your web site which is given by others quality web sites to select your web site on top or as winner web site in search results.
It does not mean the number of sites pointing to your site is your link building and the more links for your web site, the higher your ranking will be. Search Engine are very intellegent and they have very advanced ranking algorithms to find the relevancy of incoming links related to your web site.
How does Link building work ? Here's an example of how I believe link building works: Let's say that "Hotels Web Site" Web site has a link to "Web hosting web site". This probably won't help "Web hosting web site" link popularity for the keywords "Web Hosting" However, if both "Hotel Web Site and Web Hosting Web Site" are located in the India and in both the India keyword is mentioned on the page some where, and people are searching for "india web hosting" the quality of that link, may have just gone up a little. There's now a common word (India) between the sites. It probably won't help for those people simply searching for "Web Hosting", but may help if they're searching specifically for "Web Site Hosting in India". A higher quality link for "Web Hosting Web Site", however, would be one from "Web Hosting Related Pages or Directories," which has a theme of "web hosting". That is exactly the kind of link that the search engines would credit toward link popularity. The key is in having that common thread between the sites.